How to Dispute a Homeowners Insurance Claim Denial
If your home insurance claim was denied, what happens next?
Every year, thousands of Americans dispute homeowners insurance claim denials. Sometimes, the insurer reverses the denial and the homeowner receives compensation.
If you filed a homeowners insurance claim and feel wrongfully denied, then you aren’t helpless. There are multiple options available – and it’s still possible to receive compensation for your claim.
Today, we’re explaining the steps to take after your homeowners insurance claim is denied.
Step 1) Contact your Insurer about a Denied Claim
The first step to take is to contact your insurance agent or company. Review the claim you initially filed. Ask if there’s a way to improve the claim. Ask if your insurer needs additional documentation or evidence.
Sometimes, insurers deny a claim because they believe the claim was fraudulent. The insurer might suspect you’re fabricating the claim. If you only submitted one photo of damages, for example, then your insurer could be wary.
The more photos, videos, repair estimates, and receipts you can provide, the less likely your claim will be denied. Insurance companies require significant evidence to pay a claim. If you don’t have that evidence, your claim could be denied.
Call your insurance agent or your insurer’s claims department. Be polite. Listen to what they have to say. Follow any instructions they give you.
Ask your insurer if your claim can be reviewed based on new evidence. Ask if there’s a certain piece of evidence your insurer needs to approve the claim. It’s possible your insurer made an honest mistake. It’s also possible your claim was rightfully denied due to exclusions in your insurance contract.
Ideally, your insurer will agree to review the case. They could review it and adjust the settlement payout. They could also review it and reverse the denial.
In some cases, however, your insurer will not review your claim or adjust your settlement payout. If your insurer is denying your attempts to review your case, then move onto the next steps.
Step 2) Request an Independent Inspection from a Public Adjuster
Public adjusters are licensed insurance professionals. Your insurance company assigns an adjuster to your case. That adjuster’s goal is to protect the bottom line of the insurance company. You can hire your own independent public adjuster. This public adjuster’s role is to protect the policyholder.
A public insurance adjuster can perform an independent estimate on your claim. This independent estimate may cost $200 to $500. However, most public adjusters work on a contingency basis: you don’t pay the adjuster until after you approve your insurance company’s final settlement, at which point the adjuster takes a pre-arranged percentage of the final payout.
Public adjusters use their expertise to assess your claim. They analyze the damage, check your insurance policy to see what’s covered, then identify an appropriate amount of compensation based on all gathered facts.
Typically, public adjusters are hired for larger insurance claim disputes. If you and your insurer have a disputed amount greater than $10,000, for example, then it may be in your best interest to hire a public adjuster.
A public adjuster does more than just analyze the claim and your insurance policy. The public adjuster will handle all aspects of dealing with the insurance company on your behalf, fighting to make sure you receive every penny owed to you.
Ultimately, a public adjuster gives you a line of defense against an insurance company. Many people hire public adjusters when the insurer is dragging its feet. Others hire public adjusters at the beginning of a claim, before the insurer has even had a chance to deny the claim. Many policyholders hire a public adjuster after the insurer has denied the claim.
Step 3) File a Complaint and Hire an Attorney
Most claim disputes get resolved at steps 1 or 2. However, some insurance claim disputes get complicated and become necessary to litigate. In this situation, you may want to hire an insurance attorney.
You can also file an official complaint to your state’s insurance regulator. You can find detailed information on how to file an insurance complaint in your state here.
In some states and for some situations, public adjusters and insurance attorneys play a similar role. In other states, they’re two different types of insurance professionals. Both professionals, however, can escalate your claim and fight for compensation on your behalf.
Typically, the majority of claim denials and disputes can be cleared up by a Public Insurance Adjuster. A good Public Adjuster will document every bit of the process and assist with providing evidence for your case if it does turn into a legal battle. Therefore, it is recommended to talk to a Public Adjuster about any insurance claim dispute or denial first.
By hiring a public adjuster or an attorney, you can escalate the situation with your insurance company, fight for the amount legally owed to you, and ultimately get the compensation you deserve. Not sure which is the right option for your claim? See Hiring An Attorney Vs Hiring A Public Adjuster.
Reasons for Home Insurance Claims to Be Denied
Insurance companies are for-profit businesses. If they have an opportunity to deny your claim and save money, then they will take that opportunity.
Some of the common reasons to deny an insurance claim include:
Illegal Criminal Activity: If your home was being used for illegal criminal activity, then your insurance company may deny your claim. If you are using your home’s kitchen to manufacture drugs, for example, and you start a fire that burns down your home, then your insurer may deny your claim.
Fraud: Many insurance claims get denied due to fraud – or suspected fraud. Most insurers will not accuse you of fraud without a significant investigation. An investigation may reveal that you deliberately started a house fire, for example. Insurers lose billions to fraud every year. Today, they use high-end technology to determine fraudulent claims. Policyholders who get caught committing fraud will have their claims denied. They could also face jail time, fines, and other penalties.
Failure to Maintain your Home: As a policyholder, you are required to maintain your home. Maintenance is an expected part of home ownership. Insurance covers unexpected things like fires: it doesn’t cover expected things like maintenance. If you failed to maintain your home or keep your house in good repair, then your insurer could deny your claim.
Leaving the House for Extended Periods: Most home insurance policies require regular check-ins. Many home insurance policies consider your home vacant if nobody has been inside the home for 30 days, for example. This can make the policy void if there’s a fire or burglary. Some insurers require you to check in weekly during winter months. If you leave town on vacation and don’t have someone check your property regularly, then your claim could be denied.
Lack of Evidence: Many insurance claims are denied due to lack of evidence. You failed to provide sufficient evidence of the covered event, for example, or had no documentation proving value.
Delay in Filing the Claim: Some claims are denied because you took too long to file the claim. You waited 30 days before reporting the damage, for example. The sooner you file the claim, the less likely your claim will be denied.
Exclusions: All insurance policies have exclusions. Many policies exclude flood damage, for example. Your property might have legitimate damage – but if the damage was caused by an excluded event, then it may not be covered.
You can read more details about claim denials at The Most Common Reason Why Insurance Claims Are Denied.
Contact A Public Adjuster Today
A denied insurance claim can be devastating. If your insurance claim was denied, then you need to contact your insurance company to determine why it was denied – and what you can do to fix it.
If your insurer continues to deny your claim or offer a low payout, then your best option is to talk to a public adjuster for assistance.
A public adjuster is an insurance claim expert that works on your side, representing your case against the insurance company. The public adjuster can assist with every aspect of a property damage claim and fight for the fair compensation you are owed.
Stephanie is a property insurance claim expert with over 20 years of experience working as an insurance adjuster, expert witness, appraiser and umpire. She is passionate about sharing her expertise, knowledge, tips and training to help both property owners and Public Adjusters in their pursuit of effectively managing claims and recovering the claim settlement they deserve after a loss.
