Why Was My Property Damage Claim Denied?
Companies are required to tell you the reason for denial in your claim rejection notice. Understanding why your claim was rejected is key to filing an effective appeal.
Common legitimate reasons that insurers deny claims include:
- Non-payment of premiums
Your regular insurance payment (called the premium) ensures your coverage and keeps your policy active. If you fail to make the required payments, your coverage may lapse and lead to claim denials.
- Late filing
Insurance companies require policyholders to report damage and file claims promptly. The time limit on filing each type of claim varies by insurer, but it should be clearly stated in your policy. If you file your claim outside of this window, you could lose your right to recover payment.
- Lack of occurrence
Most property damage policies require all losses to be caused by an occurrence, or a single, identifiable incident. Fires, hurricanes, floods, vandalism, lightning strikes, and hailstorms are common perils that trigger coverage. Your claim will likely be denied if you can’t point to one single incident that caused the damage.
- Insufficient documentation
Policyholders are required to provide evidence of their losses with photographs, receipts, and other documentation of the damage to support their claims.
- Suspicious circumstances
An insurance company may deny claims caused by criminal activity (such as arson) or if they believe a policyholder is claiming more losses than they sustained.
- Failure to prevent additional damage
Policyholders are expected to take necessary measures to secure their homes against further damage while they wait for their claims to be processed. For example, you may need to board up windows after a hurricane or pump out standing water after pipe bursts. If the insurance company believes you didn't take reasonable steps to reduce the extent of loss, they may deny the claim.
Insurers are usually unwilling to cover every type of occurrence, especially if it is common in your area and does a significant amount of damage. In Texas, private homeowner’s insurers rarely cover wildfires or flooding caused by a natural disaster. Your claim may be denied unless you purchase a separate policy to cover these exclusions.
- Damage is less than the deductible
Your deductible is the amount of money you pay towards any damage before your insurance coverage kicks in. The deductible amount is flexible and is chosen by each homeowner when they purchase the policy. If the deductible exceeds the cost of repairing the home, your insurer won’t be liable. For example, if a fire causes $2500 worth of damage and your deductible is $5000, you’ll have to pay out of pocket for your losses. On the other hand, if your losses amount to $5000 and your deductible is $2500, you and your insurer will each pay $2500.
Let Us Deal With the Insurance Company on Your Behalf
You don’t need an attorney to file an appeal with your homeowners' insurance company. However, an insurer that will deny a valid claim could also be engaging in bad faith practices such as delaying fair payment and forcing policyholders to share liability to pay less for damages. For these reasons, it’s best to involve a reputable insurance claims attorney right from the start.
You shouldn’t have to fight to get the coverage you paid for after your home has been damaged. The experienced bad faith attorneys at Voss Law Firm can help you build a solid appeal to secure the compensation you deserve. Fill out our contact form or call us at 888-614-7730 to learn more, or start reading your copy of our free book, Tricks of the Trade: How Insurance Companies Deny, Delay, Confuse, and Refuse.