Images by Getty Images; Illustration by Issiah Davis/Bankrate
Key takeaways
Read your home insurance policy carefully to learn about what is covered and excluded before filing a claim.
Hiring an independent appraiser or insurance adjuster may support your claim or prompt your insurer to reevaluate it.
You can file a complaint with your state insurance department if you think your claim was unfairly denied.
A denied home insurance claim isn’t always the end of the road. If you think your insurance company is giving you the short end of the stick, you can appeal or dispute the claim. But, before you start the process, you’ll want to carefully read your denial letter and coverage details to make sure you’re entitled to what you believe. Should you decide to move forward, here’s how to fight a denied homeowners insurance claim.
Why was my home insurance claim denied?
Your home insurance policy is designed to help you avoid steep out-of-pocket costs for eligible damage, so it can be frustrating when a claim is denied. But, your insurance company isn’t out to get you. There’s likely a legitimate reason why your insurance claim was denied.
Some common reasons include:
Lack of coverage: Home insurance policies cover a lot — but not everything. If you’re filing a claim for damage that’s not included in your policy, your insurance company will deny your claim. Flooding and earthquakes are two notable home insurance exclusions.
Missed filing deadline: There are time limits on when you are able to file a claim. Generally, this could be up to a year from when the incident occurred, but it can vary by insurer and state. Experts recommend filing a claim as soon as it is safe to do so after damage occurs.
Not enough documentation: If you fail to submit sufficient documentation, such as photos, videos or witness statements, it could result in a denial of your claim. Insurance adjusters rely on the details when making a decision, so the more supporting evidence, the more informed a decision the adjuster can make.
Negligence: You are responsible for the upkeep of your home, which includes regular maintenance and repairs. Failure to maintain your home or perform repairs as needed can cause your appeal to be denied if found to have contributed to the cause of loss.
What if my claim settlement is too low?
It’s possible that your insurance company approved your claim, but gave you a settlement that’s lower than what you need. In that case, you’ll want to carefully read your insurance policy and all other documentation related to your claim. Like a denial, you can also dispute an insurance claim settlement if you think your insurance company isn’t holding up its end of the deal.
How to dispute a denied homeowners insurance claim
There are several potential steps to take when preparing a case to dispute a homeowners claim denial. Much of this you can do on your own, but you may end up requiring help from a third party, whether that’s a public adjuster or lawyer. However, the first thing to do is review your homeowners policy to see what it says about the circumstances around the claim you filed. Specifically, you’ll want to see whether coverage is included and details indicate damage or loss is covered or if any listed exclusions would justify the denial.
Watch out for personal property sublimits
Say you have $50,000 in coverage for your personal property, but your insurance settlement didn’t fully cover the cost of your stolen watch. That’s likely because your policy has certain sublimits for belongings that are more likely to be stolen, like jewelry, cash, firearms and silverware. You might have $50,000 in personal property coverage, but your insurance company could cap jewelry theft coverage at $1,500. If you keep valuables in the home, consider adding a scheduled personal property endorsement to your policy to fully cover your items.
If you still feel the claim denial is incorrect, you’ll want to assemble and add to your documentation. What you need to document may vary depending on why your claim was denied. Photographs, receipts, police reports and even the written inspections of contractors can be useful evidence.
Once you’ve thoroughly reviewed your policy and documented your case, it’s time to speak with your insurance company to let them know you’re disputing the claim denial. If your appeal fails, it may be wise to employ a lawyer or similar legal counsel to assist moving forward.
Below, we outline in more detail how to fight a denied claim step by step.
Ideally, experts recommend reviewing your home insurance policy before you ever have to file a claim to help minimize the risk of a gap in insurance coverage. Knowing what your home insurance covers — and what it doesn’t — can help you financially prepare for what may need to be paid for out of pocket. But if you didn’t do that and now find yourself faced with damage or loss that requires a claim, it will still be helpful if you fully understand what your policy covers.
If you have already filed a claim and are questioning the insurer’s response, checking the information you submitted is important. Ask yourself if you provided adequate supporting evidence and documentation. If you still feel the insurer misjudged your claim, you might consider filing an appeal.
If you’re fighting a home insurance claim, you’ll need to show your insurance company why you think you’re right. When an insurance company denies a claim, it will likely send you a letter or email explaining the reason why. Be sure to read it carefully to get to the bottom of why. Sometimes, it could be a more minor clerical error, such as a missed payment. In that case, contact your insurance company and see if making up the payment will get your claim paid.
Another common reason for a claim denial is homeowner negligence. Meaning, your insurance company thinks the damage you’re claiming was caused by not keeping up with home maintenance, as opposed to something covered in your policy. If that’s the case, gather proof that you’ve done regular maintenance. Collect receipts from contractors you’ve hired and other services you’ve used.
Once you are confident you understand the way the policy is written and that you have submitted everything properly, you can call your insurance company and ask for your home insurance claim to be reviewed again or request a new examination based on new information. It is possible a mistake was made by your claims adjuster the first time around. If you have any questions about your policy’s coverage, your claims adjuster can help answer those, too.
To file an appeal, having the right documentation is paramount. In general, you may need to show proof of which peril damaged the item, how damaged it was, how well maintained it was beforehand and that you were not responsible for the damage either directly or through negligence.
This may include dates and details of the incident, as well as photos, videos and witness statements, if applicable. If you are filing a claim related to your personal property, a home inventory that includes receipts could be helpful, as well.
If you have requested a re-examination of your claim and the request was denied or the claim was denied again, then it may be time for another professional opinion. As a consumer, you have the right to hire an independent appraiser or a public insurance adjuster. A public insurance adjuster is not affiliated with any particular carrier and may be hired on your behalf to help you settle a claim. The adjuster should be licensed in the state where you are filing the claim.
When hiring a professional, it’s a good idea to check references and recommendations. You can also call your state insurance department to confirm the adjuster’s record. While a public adjuster may provide useful assistance, hiring one usually comes at an additional cost. Public adjusters may charge up to 15 percent of the settlement claim, and there are no guarantees the claim will be settled.
Hiring an independent party can either show support for the insurance carrier’s original denial or provide support for your claim. If the recommendation made by the public insurance adjuster supports your claim, you could consider contacting your insurance provider and requesting to speak to the claims manager. At that point, you might request the claim be reviewed once again.
If you hired a third party and the home insurance claim was denied again or you were offered too low of a settlement, you could register a complaint with the state insurance department. This option may be best if you feel your insurer denied your claim unfairly, and you would like the insurance department to investigate the situation and confirm the insurance company is in the right.
When you contact the department, you may also be made aware of additional resources you didn’t realize were an option. The National Association of Insurance Commissioners has a list of each state’s department of insurance, which should have information on how to file a complaint in your state.
Another option is hiring an attorney, although this route will have to be paid for out of pocket. Attorneys typically charge a consultation fee and an hourly rate for legal advice, which means the expenses can add up quickly. You will have to balance the cost of an attorney with the end result of having a claim approved — or potentially denied again — and determine if the process is worth it for you.
Terms to know when disputing a denied home insurance claim
There are a few terms used in claims filing and processing that may be helpful to know up front.
Term
Meaning
Appraisal
An appraisal is a detailed assessment of either the property or property damage. An appraisal is written by an adjuster to estimate the amount of damage from a loss. The initial appraisal is usually provided at no charge from the insurance carrier.
Mediation
Mediation is a meeting between a representative for the insurance carrier and the policyholder. A mediator will facilitate the meeting and both parties will present information regarding the claim. The goal is to find a solution for both parties.
Adjuster
An adjuster is a professional hired to evaluate property damage. The adjuster will determine how much damage has occurred to the property. They will also recommend the amount to be paid out for the damage. Adjusters can be hired by the insurance company or by the policyholder.
Covered peril
A covered peril is a loss or event that is covered under your home insurance policy. If your home or personal items are damaged by a covered peril, your home insurance policy should provide a payout based on the adjuster’s findings.
Coverage limit
This is the maximum amount of money your insurance company will provide in the event of a covered loss. If the claim exceeds your policy’s coverage limits, you might have to pay the difference out-of-pocket.
Settlement
A settlement is the payout you receive from your insurance company after a covered claim. It’s calculated based on the adjuster’s investigation of the claim, including what was damaged and the estimated cost of repairs. If you have a deductible, it will be taken out of your final settlement.
Frequently asked questions
If your homeowners insurance claim is denied, disputing the claim could be a good option. However, it might cost you money. While disputing a claim in itself doesn’t cost anything, you will probably have to pay if you hire a public adjuster or insurance attorney. These professionals often charge a fee that is equal to a percentage of your final settlement, but you should ask about exact costs before hiring someone.
A home insurance adjuster handles claims for the insurance company or policyholder. Their job is to verify the claim details, investigate the loss, look at the damage and estimate repair costs. While a home insurance adjuster usually works for a homeowners insurance company, a public insurance adjuster is a third party that may be hired to perform an independent claim estimate.
Disputing an insurance claim denial for renters insurance is like disputing a homeowners insurance claim denial. Consider taking the same steps, which could include reviewing the claim and coverage details, filing an appeal, getting an independent professional opinion, filing a complaint with the state’s insurance department and hiring an attorney.
You aren’t required to hire an attorney to dispute a denied claim. You can file an appeal with your carrier on your own. This may be enough to get your claim approved, but if it isn’t, you may want to hire an independent appraiser or a public insurance adjuster for advice and guidance. If your claim is complex or the appeals process has stalled, you might consider hiring an attorney. However, you may want to weigh the potential payout against the attorney’s fees.
It might. Homeowners insurance companies calculate your premium based on multiple factors, but the one thing those factors have in common is risk — that is, how much of a risk there is that you will file an expensive claim. Filing a claim, even if it is denied, could indicate that you are more likely to file a claim again in the future. Each insurance company has its own unique algorithm for calculating your home insurance rates, so it might be helpful to shop around and get multiple quotes if your premium rises after you file a claim.
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