Home Insurance Claim Denied: Next Steps

If your home insurance claim is denied, look at the basis for the denial and explore options for resolution. Seek clarification from your insurer, or appeal the decision.

Start by reading your denial letter carefully. Refer back to your insurance policy to verify that the letter is accurate, and then write down questions you have before reaching out to your insurance company.

Understanding Your Denied Homeowners Claim

A denied home insurance claim can be unsettling for any homeowner and may create unexpected financial strain. If this happens to you, pause before picking up the phone to call your insurer. 

Instead, take time to understand why your claim was denied and explore possible avenues of resolution. If you plan your next steps, you’ll be in a better position to get a more favorable result.

Key Facts

Common Reasons for Denied Claims

Homeowners insurance claims can be denied for a range of reasons. These are some of the most common:

• Policy exclusions and limitations: Home insurance policies often contain specific exclusions and limitations, such as not providing coverage for certain forms of damage or events. Your homeowners insurance policy may exclude damage due to certain natural disasters like floods or earthquakes.

• Taking too long to file the claim: Most insurance policies specify an exact deadline for filing claims. If you miss a deadline, it could be grounds to deny your claim.

• Damage that doesn’t exceed the deductible: Home insurance deductibles represent the amount you must pay before coverage kicks in. If the damage costs less than this amount, your claim might not be approved.[1]

• Lack of maintenance: Home insurance policies generally stipulate that proper home maintenance must be performed.[1] Failure to do so could lead to hidden damage, and your provider may determine that the damage was due to your neglect rather than another event.

• Insufficient documentation: Provide full documentation of any damage, such as photographs, videos, estimates, receipts, and any other relevant documents.

• Natural wear and tear: Home insurance typically provides protection from sudden and unexpected events rather than normal wear and tear.[2]

• Non-payment of premiums: Default on insurance premium payments will result in policy cancellation. Any claims filed after that point will likely be denied.

• Suspected fraud: Insurance companies conduct in-depth investigations of submitted claims. Any suspicion of fraud or dishonesty will likely result in the claim being denied.

What to Do When Your Claim Is Denied: Next Steps

It’s upsetting to find out that your home insurance claim has been denied, but you have options. Take these steps to start an appeal:

1. Review the Denial Letter

Carefully read the denial letter from your insurance company. It should include specific reasons for their decision as well as references to policy terms. If you are unclear on any part of it, note your questions.

2. Contact Your Insurance Company 

Reach out and seek clarification on the reasons behind their denial that you disagree with. Provide copies of sections in your insurance policy that support your claim. It’s best to keep this communication in writing to guard against potential future disputes.

3. Gather & Review Documentation

Collect all documentation related to your claim. This could include photos, receipts, estimates, or any other supporting evidence for your case.

4. Understand the Appeals Process

Acquaint yourself with your insurance company’s appeal process. This information should be contained within the denial letter or found on their website. If you are unclear on any part of this process, reach out for clarification.

5. Get Help 

Consider seeking professional advice. Public insurance adjusters, attorneys, and independent experts can offer guidance and advocate on your behalf in order to assist with settling the dispute. While you’ll incur additional costs, the investment is well worth it if you are successful with your appeal.

Ways to Resolve a Denied Claim

If you believe that your claim was denied in error, you have options. In most cases, start with a formal appeal, escalate the issue as needed, and potentially seek legal recourse if you believe that laws are being broken.

Here are the steps to take:

1. Appeal the Denial

When your homeowners insurance claim has been denied, one of the first steps you can take is to file an appeal. Challenging the rejection by offering evidence or arguments that support your position may be all you need to do to overturn the denial.

To do this, review the denial letter, contact your insurance company to express intent to appeal, gather supporting evidence, and prepare an appeal letter with documentation for submission to the insurer.

Expert Take

Although insurance may seem black and white, the appeals process is the time to explain any exceptional circumstances surrounding your claim. Appeals reviewers may be authorized to make judgment calls, but to do so, they need all relevant information.

Lisa A. Koosis – Insurance and Finance Subject Matter Expert

2. Escalate the Issue if Necessary

If your appeal for a denied insurance claim proves unsuccessful, and you believe you’re being treated unfairly, there are further steps you can take to seek resolution. 

Contact your state’s insurance department for guidance on whether the insurance company complies with state laws.[3] 

You can also consult an ombudsman or consumer protection agency for help in resolving disputes with your insurer. They specialize in assisting policyholders and mediating fair resolutions.

3. Seek Legal Advice

While consulting an attorney is often considered a last resort for resolving a denied homeowners insurance claim, there are specific situations where it may be a necessary step, such as these:[3]

• If your insurance policy is hard to understand, an attorney can clarify things and check to see if the denial is fair.
• When you suspect your insurer is being unfair, an attorney can help you to better understand your rights and which legal avenues you should pursue.
• If your appeals keep getting denied despite good evidence, an attorney can help you see where your claim is weak.
• When the process is slow or difficult, a lawyer can speed things up and protect your rights.

Tips for Avoiding a Denied Claim

To prevent the frustration of a denied insurance claim, take the following proactive steps to avoid denied claims:

• Understand your policy exclusions and limitations. Take time to thoroughly read and understand your insurance policy.[4] Knowing what is and isn’t covered can help you to avoid filing claims for non-covered incidents.

• Pay your premiums on time. Timely payments of premiums ensure your coverage remains active. Otherwise, claims could become denied or subject to penalties.

• Don’t miss the claim deadline. Be mindful of your insurer’s claim filing deadline, and submit your claim on time to avoid potential rejections.

• Submit clear and concise documentation. When filing a claim, provide clear and complete documentation, such as photos, videos, receipts, and detailed accounts of what occurred. Detailed reporting can speed up the claims process significantly.

• Disclose all home additions and modifications to your insurance provider. Inform your insurer immediately of any alterations or upgrades to your property. Failure to do so could result in coverage disputes when an incident occurs.

• Keep up with regular home maintenance. Maintain your property regularly to protect it against damage. Insurance claims could be denied due to negligence or lack of maintenance.

• Stay informed about policy changes. Maintain an awareness of policy modifications, coverage adjustments, and renewals. This will enable you to make informed decisions and avoid surprises when filing claims.
• Prepare for weather events. Some policies require homeowners to prepare for predicted weather events, like upcoming hurricanes. For example, if you have storm shutters, you should put them up before a hurricane. Otherwise, your insurer could deny any claim for damage caused by the storm.

Frequently Asked Questions About Homeowners Insurance Claim Denials

We have compiled some of the most frequently asked questions about denied home insurance claims to help you navigate the process and understand your options when your claim has been denied.

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Reviewed by Lisa A. Koosis

Lisa A. Koosis is an experienced content writer who has ghostwritten extensively for clients in the insurance and finance sectors. As a subject matter expert, she can explain complex financial topics in easy-to-understand language. Lisa is well-versed in topics ranging from life insurance to pet plans and specializes in medical insurance including Medicare, Medicaid, and commercial plans.