home insurance claim denied
July-06-2023

What to Do When Your Home Insurance Claim Is Denied

Home insurance is meant to provide you with peace of mind, knowing that your property and belongings are protected. However, there may be instances where your claim is denied, leaving you feeling frustrated and helpless. But fear not, because there are steps you can take when faced with a denied home insurance claim.

Unexpected Challenges When a Home Insurance Claim Is Denied

Insurance providers often issue denials on valid claims, leaving homeowners in the overwhelming and seemingly impossible situation of not being able to pay for damage to or destruction of their property. Insurance companies will often hope that homeowners will just accept their decision without raising a challenge.

However, a denial of your property damage coverage doesn’t have to be the end of your claim. You can legally dispute the denial or any partial settlement you were offered, which we discuss in this article.

Understanding the Common Reasons for Denial

If your insurance company denies your claim, you are entitled to a reason for the insurance claim denial. A home insurance claim denied could be denied for some of the following reasons often cited by insurance companies:

Non-payment of premiums

The premium, which is your regular insurance payment, keeps your policy active. If you fail to make the required premium payment, your coverage may lapse, and you may end up with a denied insurance claim.

Late filing

Insurance providers require policyholders to report damage and file claims within certain timeframes stated in the policy, which is a binding legal contract between you and your insurance company. Though these timeframes may vary slightly, they can always be counted on to be prompt. If you file your claim outside of the window set up in the policy, an insurance provider might use this as a reason for your home insurance claim to be denied.

Insufficient documentation

Policyholders are required to provide evidence of their losses with photos, receipts, and other documentation of the damage incurred to support their claims. Without these, you may receive an insurance claim denied.

insurance claim denied

Exclusions

Insurers are often unwilling to cover any occurrence which is specifically excluded by your policy, which is why it is recommended to seek out the help of an experienced property insurance attorney who can analyze and explain the fine print of your insurance policy to you and ensure your rights are protected.

Lack of occurrence

Most property damage policies require all losses to be caused by an occurrence, which is a single, discernible incident. Fires, floods, earthquakes, mudslides, storms and intense weather, lightning strikes, and vandalism are common perils that trigger coverage. In other words, these are all occurrences. If your insurer can’t tie your claim to an identifiable occurrence, it may try to deny your claim.

Suspicious circumstances

The insurance company may imply or even expressly state that it is denying your claim due to suspicious circumstances surrounding your loss. For example, the insurance company may claim that you caused or contributed to the damage your home suffered through negligence or intentional action or that the circumstances were otherwise suspicious in some way.

Failure to prevent additional damage

Sometimes also called “failure to mitigate,” this claim for an insured denied claim comes from your insurance company stating that you failed to take necessary measures to protect your home from further damage while awaiting the outcome of your filed insurance claim. For example, boarding up windows after they were blown out in a windstorm, or shutting off the water after an outdoor hose line explodes, would be efforts to prevent additional damage.

Steps to Take Immediately When Your Home Insurance Claim Is Denied

What should you do when your insurance claim is denied? Here are the important steps to take.

Reviewing the Denial Letter

The most critical step to begin appealing your homeowner’s insurance claim is to read the denial letter sent by the insurance company with a careful eye. Never sign off on any documents that agree with your initial claim result and never cash any checks, which is seen as a legal term called “satisfaction” and may serve to “ratify” whatever your insurance company has claimed is the outcome. This will make an appeal of your insurance claim denied far more difficult.

Knowing Your Legal Rights

Sometimes a home insurance claim denied can result from a misunderstanding on the part of your insurer. If you know your rights under your policy, you can bring any discrepancies to your loss adjuster’s attention to appeal the denied coverage.

You should receive a written statement from your insurance provider that states the exact reason your property insurance claim was denied. You have every right to contact your insurer if you don’t understand why your claim was rejected or if the reasons they provided are unclear or untrue to you. You can also commission an independent appraisal to obtain a second opinion which you can submit to your insurance company as part of your appeal.

Gathering Evidence and Documentation

The next step in what to do when insurance denies a claim is to gather as many documents regarding your insurance claim as you possibly can, which you hopefully have saved and are easily accessible in one location – like a folder, a cloud drive, a hard drive, or a safe. These critical documents include any and all letters, emails, reports, pictures, phone calls, voicemails, checks, texts, and chats – really anything at all that will help you tell your story and refute your insurance-denied claim.

Seeking Professional Assistance

Although there are many times when dealing with insurance that attorney assistance is preferable, it is crucial when beginning the uphill battle of appealing a denial.

Appealing the Denial

In most cases, with your basis for appeal, your documents, and your counter-narrative ready to go, you can file an appeal directly with your insurer and ask them to reopen the file and review your claim.

If the insurance company again denies your claim, the policy may provide for alternative dispute resolution methods, like arbitration or mediation, or, if these procedures are not in place, you may be able to consider filing a court action in the State of Texas for such grounds as:

Seek Professional Guidance from MMA Law Firm

As professionals who help clients interpret insurance policies, understand their rights, and recover on their losses every day, the attorneys at MMA Law Firm are well positioned to assist clients with insurance in the State of Texas. Contact us today to learn more.