When your property is damaged by a disaster like a tornado, fire, or flood, the last thing you want is to hear that your insurance claim was denied.
In some cases, the insurance company will outright deny your claim and in other cases you will receive a low ball offer that is much less than you expect. In this case, it’s important to know why and how your property insurance claim could be denied.
Here are some of the most common circumstances in which a property insurance claim would be rejected, and tips to prevent a denial from happening in the first place:
1.) Filing a property insurance claim and damage estimate for overstated or fabricated damages
Filing a claim and damage estimate for overstated or fabricated damages is a very serious breach of your insurance contract. In such cases, you risk having the claim not only denied but also subject to criminal charges. In most states, filing a false claim may be considered a felony offence and may even result in imprisonment for up to ten years as well as other penalties.
2.) Not filing a property insurance claim on time
When you experience a loss, it is important to notify your insurance company as soon as possible. In order to file a claim, you will need to meet certain time-sensitive requirements for notification and documentation. If you fail to meet any of these requirements, your insurance company will generally deny your claim.
In most cases, the denial notice will state that you failed to file your claim within a specific time period after experiencing the loss. In many cases, it is very important that you are able to provide proof of timely filing to avoid having your insurance claim denied.
3.) Not reading insurance policy wording thoroughly before filing a property insurance claim
Different insurance companies use different wording when setting out what is and is not covered under their policies. In some cases, seemingly very similar property damage may result in completely different property insurance claims depending on the property policy language, and what exactly it covers and excludes for your specific location and property type. It is especially important to thoroughly review all of the exclusions and loss-related conditions in order to avoid having any resulting claims denied.
4.) Not filing your property insurance claim with the appropriate insurance company for your location or situation
In most cases, you will be required to file an insurance claim with the company that issued your property insurance policy. In some specific situations and locations, however, there may be a different policy that covers the damage on your property. In such cases, it is important that you understand how and where to file each claim. In some situations, you may even be required to file both claims.
5.) Not properly reporting content damage
If there is fire damage to the structure, it is important for an insured to notify their insurance company of any fire damage within a reasonable time, which varies depending on the circumstances. In addition to notifying your insurance company of the loss, certain information must be provided in order to have coverage for the content. In fact, some regulated states require an appraiser to inspect both structure and contents damages prior to reimbursement for either one.
6.) The insurance policy limit is insufficient in covering repair costs
When an insured property suffers damage, the cost of repair is usually estimated and documented prior to the claim being paid out. In order for your insurance company to agree to pay the appropriate amount, they will usually need to approve both the repair costs and any additional amounts required for items that are not covered by the policy limits.
7.) Non-payment or missed insurance premiums
Making sure you pay your premiums on time is crucial – if you miss payments, your insurance company may reject your claim. In some cases, it may even cancel your policy. In the case of a rejected claim, you’d have no coverage whatsoever. In the case of a cancelled policy, that’s it – you’re done with that company and will need to find another one for future use.
8.) Insufficient documentation of the damage
As a property owner, it is important to remember that you have a responsibility to file a property insurance claim and provide accurate evidence of the damage done. This means taking photographs of the damage and documenting it in detail. If you are able to, try to take notes on the extent of the damage as well. In case an adjuster has any questions, you’ll be glad you have all the information documented properly.
9.) Not taking sufficient preventative measures following a loss
If you don’t take reasonable steps to protect your property from further damage after a loss, your insurance company may reject your claim. This includes leaving the property exposed to further damage and not taking measures to reduce the extent of the loss. Make sure you take action following a loss to minimize any damages.
10.) Inability to prove ownership of the property
Insurance companies need proof that you own the property in question. In some cases, there may be other people or entities legally responsible for your property damage, if it is a rental unit, shared living premises, etc. In these situations, it’s important to show proof of your legal right to file a claim.
In some states, you may also be required to provide proof that you have the right to file for insurance coverage on behalf of whoever is responsible for your loss. In most cases, this will include a contract or other legal documents showing authorization of your actions.
Tips to Avoid Denial
- Notify your insurer promptly of any loss and understand the requirements time limits for filing a claim.
- It is important to know what constitutes allowed damages for your specific property type and geographical location. In other words – do your homework!
- Make sure you have proper coverage in place prior to any sort of loss or damage to your property.
- Document your damage carefully and make sure you keep track of everything. In case anything comes up, it’s always safer to have the information on-hand.
- Remember that any damage caused by negligence or poor maintenance is not covered by insurance!
The question: “circumstances in which a property insurance claim would be rejected?” is one we get often. In these cases, it is important to understand how and where to file each claim. In some situations, you may even be required to file both claims. If you are not able to provide enough documentation about your damage or neglect took steps following a loss then there’s no chance for coverage either way. Make sure that before any sort of loss or damage happens on your property that you’re adequately insured!
If this all seems like too much work, consider hiring a public adjuster to take care of it for you. In fact, many property owners find the added cost to be worth it. In some cases, public adjusters can even get you back more than what your insurance company originally offered.
Citizens Public Adjusters can help you avoid a rejection of your claim and get the most out of your insurance policy. In this case, it is better to spend a little more on an experienced public adjuster then end up with nothing!
Contact us today for more information and to get started on your claim.