Insurance Company’s Lowball Strategy Backfires

Insurance Company’s Lowball Strategy Backfires by Evan Schwartz

If a case against an insurance company has merit, the question isn’t whether the company will pay, but rather when? And how much?

Grand Reserve of Columbus LLC, v. Property Owners Insurance Company, a recent case in Georgia, exemplifies this: an apartment complex successfully recovered over three times the insurance company’s initial value of the claim.

In 2013, the roof of the plaintiff’s apartment complex was damaged by a hailstorm. Initially, the insurance company lowballed the value of the claim and determined that the complex was entitled to approximately $190,000. The complex had an adjuster who valued the damages at $1.3 million.

In response to that valuation, the insurance company offered an additional $25,000, which the apartment complex did not accept — filing a lawsuit instead. The case went to trial, and the jury awarded the apartment complex $550,000. The insurance company challenged the verdict and appealed to the 11th Circuit Court of Appeal (which governs cases out of Georgia).

The circuit court sustained the jury’s verdict. The court told the insurance company they could not challenge: 

•the jury’s findings;

•the quality of the apartment complex’s expert, because the individual had sufficient qualifications; nor

•the evidence that was submitted (which was sufficient to show that an additional $550,000 worth of damage existed).

At the conclusion of this process, the apartment complex received over $700,000 for the damages; originally, the insurance company wanted to pay less than ⅓ of that amount.

The important point here is that the apartment complex not only maintained their position, but they fought for it! In this atypical instance, the case ended up in trial, and then on appeal. Usually, insurance companies will fight up to the point of trial — and then settle.

Unfortunately, it is often necessary to file a lawsuit or be in the very early stages of a lawsuit in order to get the insurance company to settle. Until the plaintiff pushes the envelope, the insurance company will dig in its heels. With an effective lawyer, you can respond in a way that ensures you are paid what you are due.


Evan S. Schwartz
Founder of Schwartz, Conroy & Hack