Understanding Property Loss vs. Economic Damage in Maui Wildfire Claims

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Property loss and economic damages can be devastating.  Losing everything you’ve worked so hard to build can take an emotional and mental toll that words cannot describe. However, if that day should ever come, knowing the difference between property loss and economic damage can help you better understand how to best navigate the path ahead.

At Morgan & Morgan, we offer free, no-obligation case evaluations for individuals and families who have suffered property loss or economic damage. This helps us determine whether you or your family is entitled to compensation. If that’s what you need, get started today by filling out our free case review form. 

What’s the Difference? 

Property loss is the physical damage to your property. In theory, insurance should cover these losses by paying to repair or replace them.

Economic damage, on the other hand, is the disaster’s financial impact. In most cases, it goes beyond the physical damage.

These financial losses can add up quickly. Even worse, they’re often not so easy to quantify. As a result, insurance companies sometimes play hardball when handling such claims.

Examples of Property Loss

Property loss can take many forms, including:

• Damage to the structure of your property, such as walls, roof, or foundation
• Loss of personal belongings, like furniture, electronics, and clothing
• Destruction of appliances and major systems (heating, plumbing, etc.)
• Damage to landscaping, outdoor structures, or fencing
• Loss of valuables like jewelry, artwork, or family heirlooms

Examples of Economic Damage

As we said, economic damages are more about the financial impact of property loss. Examples of economic damages include:

• Costs of temporary housing or hotel stays while your property is repaired
• Lost rental income if part of your property was rented out
• Medical bills if someone was injured during the disaster
• Lost wages if you had to take time off work to deal with the aftermath
• Long-term drop in property value due to damage

Common Challenges in Seeking Compensation

Obtaining compensation for property loss and economic damage isn’t always straightforward. Factors that make the process complex include:

Coverage Disputes

Insurance companies may claim that certain types of damage, like floods or earthquakes, aren’t covered under your policy. They’ll try to point to the fine print and deny claims based on technicalities. This can be a hard pill to swallow, especially for people who believe that insurance companies are there to help people after a tragedy.

Lowball Settlement Offers

If you make a claim with your insurer, they may offer you a quick settlement. You should be very skeptical of early settlement offers, as some insurance companies will make you a lowball offer just to see if you’ll settle your case for less than it’s worth.

Don’t let anyone pressure you into taking an offer for less than what your claim is worth. When you’re already dealing with the stress of losing your property, the last thing you need is to be shortchanged.  

Disagreement Over the Extent of Damage

In some cases, insurance company’s adjusters might downplay the extent of your property damage. As the Bureau of Labor Statistics says, the goal of adjusters working for insurance companies is to save as much money for the insurance company as possible. Unfortunately, many people don’t know or understand this, and, as a result, they end up taking lowball offers that leave them with unexpected out-of-pocket costs. 

Disputes Over Valuation

Even if your insurance carrier acknowledges the loss of your property, they may still argue over how much your loss is worth. For instance, they may dispute the value of your property or belongings. They may also suggest paying the depreciated value of damaged items rather than what it would cost to replace them. This can leave you unable to afford proper repairs or replacements for the damaged items.

Claim Denials

Sometimes, insurance claims are denied on arrival. These companies may argue that:

• the damage isn’t covered under your policy;
• the claim was filed too late;
• there was insufficient documentation to prove the extent of the damage;
• the claim exceeds the policy’s coverage limits;
• the damage was pre-existing; or
• there are some policy exclusions or fine print that limits the payout.

Often, these denials are usually unjustified. But, many property owners don’t fully understand their rights, and, as a result, accept the denials without a fight.

Delays in Processing the Claim

Some insurers may drag their feet on processing your claim to the point that you get tired of pursuing the compensation you deserve. They may ask for more documentation, delay inspections, or take months to make a decision on your claim. Meanwhile, you’re struggling to pay out-of-pocket for temporary housing and other expenses. Eventually, you may feel tempted to settle for less – or even give up altogether.

Disputes Over Liability

When someone else’s negligence contributes to your damage, such as where the damage was caused by faulty construction or an electrical fire, it’s possible that your insurance company will likely dispute liability. 

On Maui, the issue of disputed liability is already playing out in public view. Hawaiian Electric, the utility company that serves 95% of homes on the island, is blaming the Maui County Fire Department for “fumbling the emergency response.” Meanwhile, Hawaiian Electric has been blamed for not de-energizing its power lines despite knowing the strong winds forecasted for the islands. 

Misinterpretation of Policy Terms

Insurance policies are often full of complicated language and fine print that can be difficult to interpret. Insurance companies may use the complexity of these agreements to their advantage, using vague clauses to deny or reduce your claim.  

Let Morgan & Morgan Help Recover Your Loss

It doesn’t matter if it’s damaged property, a drained bank account, or both; a loss is a loss. At Morgan & Morgan, our job is to make sure that you’re adequately compensated if you’ve suffered some form of loss due to someone else’s actions or inactions.

Insurance companies have a financial incentive to deny and reduce claims. That’s why we’re here. We’ll fight to get you full compensation for your damages. Contact us today to get started with a free case evaluation.  

Advertising Material. Bora S. Kayan, Esq. is responsible for the content of this advertisement. Cases may be associated with, or referred to, other law firms as co-counsel or referral counsel in these and other jurisdictions. Prior results do not guarantee a similar outcome. This post is not legal advice. If you need legal advice, you should consult a lawyer.