What to Do If Your Home Insurance Claim Is Denied

You expect your homeowners insurance policy to be there and cover the costs after a covered event, such as a fire, a burst pipe, theft, or vandalism. But what if you file a claim and your insurer denies it?

This could happen for a number of reasons. Maybe you don’t have sufficient validation to prove the claim. Maybe you missed the filing deadline, or the repairs weren’t approved. If your claim gets denied, you have options.

Here’s what you need to know about home insurance denials.

Why homeowners insurance companies deny claims

Homeowners insurance companies may deny claims for various reasons, including:

• The damage isn’t from a covered peril under your policy terms. Home insurance coverage applies to a variety of situations, but it doesn’t cover everything. Your claim will likely get denied if it involves an excluded peril, such as damage from earthquakes, floods, rodent or insect damage, or intentional damage you caused.

• The damage is due to wear and tear or a lack of maintenance. As a homeowner or property owner, you’re responsible for the maintenance and repairs of the home. If your claim is related to normal wear and tear or a lack of maintenance, the insurance company will deny it.

• You made repairs that weren’t approved. You might have to make immediate minor repairs to prevent further damage to your property. But the insurer will need to approve all major repairs. If you file a homeowners insurance claim for repairs done without approval, you can expect it to be denied.

• You filed the claim too late. Most home insurance policies impose deadlines for claims. If you wait too long, the insurance company can deny your claim, so it’s important to act promptly.

• You didn’t provide sufficient documentation. When you file a homeowners insurance claim, evidence is essential. Without sufficient documentation, such as photos, videos, receipts, and the estimated values of your personal items, you may face a claim denial.

• Your insurance company suspects fraud. Once you file a home insurance claim, an insurance adjuster will likely visit your property, evaluate the damage, and determine a potential payout. If the adjuster suspects intentional property damage, exaggerations, or any other type of fraud, your claim may be denied.

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How to dispute a denied home insurance claim

A denied claim doesn’t mean you’re out of options. You can dispute the decision with your insurer by following these steps.

1. Find out why the claim was denied

First, reach out to your home insurance company or insurance agent. Ask them to explain the reason for the denial. If the denial was due to inaccurate information, you can ask them to re-evaluate.

2. Keep detailed records

Document all communication you have with the insurance company, including phone calls, emails, text messages, and letters. It’s a good idea to keep track of all the documents and photos you send them. You should also jot down instances when the insurer or agent doesn’t return your calls or emails, as this information may come in handy in court.

3. File an appeal

You may have to go through the formal appeal process with your homeowners insurance company. The steps you’ll need to take depend on your insurer. Note that you may have a deadline and time-sensitive requirements for this, so it’s important to check your policy or ask your insurance agent.

4. Consider hiring a public adjuster

A public insurance adjuster can guide you through the claims process and ensure that the insurer is treating you fairly. The adjuster can also prove you have a valid claim. You can find a local adjuster in the National Association of Public Insurance Adjusters database.^[1] Before hiring an adjuster, ask for references and check their license to make sure they’re reputable.

5. Contact your state’s insurance department

If you still believe your insurance company is in the wrong, reach out to your state’s insurance department to learn more about your rights and to file a formal complaint. Depending on the state you live in, you may also receive mediation services for your dispute.^[2]

6. Hire an attorney

In some cases, it might make sense to consult an attorney for legal advice. An attorney may pursue traditional legal action or mediation, which involves a third-party mediator who can help you negotiate with the insurance company and come to a resolution that works for everyone. Since legal representation is costly and time-consuming, it should probably be your last resort.

How to dispute a low claim settlement

If your insurer approves your claim but you think the settlement amount is too low, you may dispute that as well by following these steps:

1. Collect relevant documents. Gather photos of the damage, police reports, estimates for repairs, and receipts for any temporary repairs you made.

2. Review your policy details. Take a close look at your home insurance policy and refresh yourself on the coverage details and exclusions.

3. Contact your insurer. Reach out to your agent or insurance company, and explain that you’re displeased with the low claim settlement.

4. File a formal appeal. If your discussion with your insurer doesn’t lead to a favorable outcome, file a formal appeal.

5. Consider an appraisal, mediation, or legal help. Appraisals by an independent third party, mediator, or lawyers are a few options to explore if your appeal gets denied.

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