If you’ve ever dealt with a homeowners insurance claim denial, you know how stressful and frustrating it can be. Homeowners insurance is important to protect your property and peace of mind. When you have a standard homeowners insurance policy, it will usually insure the structure of your home and your belongings in the case of some destructive event, like a fire. Most homeowners insurance policies are considered package policies, so the coverage includes property damage and liability. Liability is your potential legal responsibility if other people are hurt on your property.
There are a number of things not covered by homeowners insurance, including floods and earthquakes. Depending on where you live, you might have separate policies for these situations.
While we think about it being broadly protective, there are a number of reasons that your homeowner’s insurance claim might be denied.
What’s Covered by Homeowners Insurance?
Your specific coverage is dependent on your insurance carrier and your policy, but the general idea is that your policy should cover the costs of repairing or rebuilding your home if it’s damaged or destroyed by a fire, lightning, hail, wind damage from hurricanes, or other disasters as long as they’re listed in your policy. The majority of policies will also cover detached structures on your property, like garages.
Standard policies do not cover routine wear and tear, earthquake, and flood damage.
The goal when you purchase a homeowners policy is to make sure that you get enough coverage for the costs of rebuilding your home.
How Does the Claims Process Work?
While an insurance carrier might have slight variations on how they handle claims, usually, the process for homeowners insurance can look something like the following:
- If your home is damaged, you should report the claim to your insurance company as soon as you can. The sooner you report damage, the sooner the insurance company might be able to help you.
- Then, once you’ve let the insurer know there’s damage, a claim professional will usually contact you to talk about what happened, and they may use this time to go over the specifics of your insurance policy.
- The claims professional will start arranging a time to see the damage in person.
- In the meantime, you should try to make a list of everything that was damaged and save your receipts if you have to make any repairs.
- If you can’t stay in your home after a covered loss, your insurance policy might reimburse you for extra living expenses like staying in a hotel.
- After a claim professional comes to inspect the damage, they can make a determination as to whether or not your policy will cover the loss. You should then receive a check based on the estimate for the damage. You might get the check on the spot or shortly after the claims adjuster comes to your property.
Reasons For a Homeowners Insurance Claim Denial
While the steps to submit a claim and get reimbursed when your home is damaged can on the surface, seem simple, there are situations where claims are denied. While every situation is different, as are all policies and insurance carriers, examples of reasons a homeowners insurance claim can be denied include:
- The damage-causing event isn’t covered. This can get tricky. While your homeowner’s insurance might cover damage from hurricanes, for example, if it’s actually flooding that causes the damage, your claim might be denied.
- Not filing a claim quickly enough. An insurance carrier will usually have a window of time within which you have to file a claim for them to approve it, highlighting the importance of doing it as soon as possible.
- Not making temporary repairs following the damage. If a covered event damages your home, your insurance company might have the expectation that you’ll make temporary repairs to avoid further damage until it can be fixed permanently. If you don’t do this, damage occurring after the original event might not be covered. An example is a broken window—if you don’t cover it and the elements damage your home beyond the original damage, that might not be covered.
- Incomplete claims. An insurance provider can deny your claim if there’s insufficient evidence. For example, maybe you say something in your home was damaged, but you have no proof of owning it or its value, leading to a denial.
- The damage is characterized as normal wear and tear. If you have old items in your home and they’ve deteriorated over time, an insurer might deny your claim with the reason that the damage is from regular wear and tear.
- Your insurance lapsed. You can easily avoid this, but you might not realize your homeowner’s insurance has lapsed. Make sure your premiums are always paid up.
- Negligence. If some sort of negligent act could be related to the claim, it might be denied. This would primarily occur if a claim was related to liability.
- Fraud. If an insurance adjuster suspects fraud, they might deny your claim.
If an adjuster denies your claim, or you believe your settlement should be more than it is, you have recourse available. You should start by carefully going over the denial because that will outline the reason for the adjuster’s decision. You can then start to gather evidence and contact your claims representative.
In situations where you can’t come to a resolution with your claims representative, you can contact the insurance department in your state. Every state has a department where you can file a complaint about your insurance carrier or agent, and this department may be able to help you come to a resolution.
At Disaster Management Recovery Group, we can proactively help you if you’re dealing with damage to your home because of a storm. We can help start the claims process and quickly assess your home’s damage. We work directly with insurance companies to simplify the experience for you, providing them with everything they need to process your claims efficiently. Contact us to learn more.