9 Common Reasons Why Property Insurance Claims Get Denied

Countless property insurance claims, worth millions of dollars, are denied in the U.S. each year. Insurance companies are basically for-profit organizations. This means that if an insurance carrier has a reason to deny your insurance claim, they will surely take advantage of it.

Insurers usually deny claims due to exclusions in a policy. They can also deny your claim because of other reasons like nonpayment of premiums, delay in filing the claim, or suspicion of fraud.

If you are concerned about your insurance claim being denied, knowing the possible reasons behind claim denial can help. Here are nine common reasons why a homeowner’s property damage insurance claims are denied by insurance companies in the U.S.

Let’s Look at the 9 Reasons Why Claims Get Denied

1. Waiting Too Long to File the Claim

Almost all types of insurance companies need you to file a claim in a timely manner, usually specified in the policy.

Most insurance policies have a particular time limit, varying from 30 to 60 days.

Almost every policy has a general “timeliness” guideline. If you fail to file your claim within that time window, your insurance company may deny your claim.

2. Lack of Evidence

Insurers lose a substantial amount of money each year to forgery.

To counteract this, insurance companies ask for solid evidence.

This may include videos, images, and receipts of damaged/lost belongings to prove their dollar value.

In most cases, insurance companies perform due diligence, but if your company makes unnecessary demands for evidence, it may indicate that they aren’t working in good faith.

In such a situation, consider hiring an experienced public adjuster to deal with your insurer.

3. Unpaid Insurance Premiums

If you have not paid your monthly/yearly premiums on time or missed paying the latest one, your insurer may deny your claim.

4. Failure to Take Preventive Steps

Insurance companies require property owners to take precautionary measures to stop further property damage.

Any repairs you make should be temporary so that when the insurance company representatives visit you, they can see the real damage.

5. Your Damage Falls Under a Policy Exclusion

Every insurance policy has some exclusions.

For example, most homeowners’ policies don’t cover flood damage.

If any damage to your property is because of an excluded event, then your claim may be denied by your insurer.

Your insurer may argue that all your damage is the result of the excluded event, even when the bulk of the damage wasn’t due to that event. Hence, in such a tricky situation, it is best to hire an established public adjuster.

6. The Damage was Deliberate

Property owners cannot damage their own insured property intentionally and expect later to cover the losses with their policy.

If your insurer finds that the damage to your property is negligent, criminal, or deliberate, then they may deny your claim.

7. Undisclosed Property Information

Insurance companies examine your home, determine risks to your property, and accordingly, charge premiums.

For instance, if your home has old electrical wiring that you haven’t upgraded for decades, it is likely to increase the risk of fire and therefore, your insurer should ideally be informed about it.

If you fail to disclose such information to your insurer, they may deny your claim.

8. False Statements

You may have a rightful claim, but it can be denied by your insurer if they find you making false statements about specific aspects of your claim.

Always speak the truth to your insurer.

Since all insurance companies have a specific fraud prevention system in place, the truth will eventually be revealed.

9. Insurance Policy Cap

Most insurance companies set a cap for the monetary value of every item.

In case of loss or damage, your insurer will compensate you only up to that cap.

For example, if your wedding band, worth $10,000, gets stolen and your policy has a cap of $5,000 for jewellery items, then your insurer will give you $5,000 as compensation, regardless of the actual dollar value of that band.

What to Do If Your Insurance Claim Gets Denied

Insurance companies in the U.S. rightfully deny thousands of claims each year. Your insurance company may decrease or deny your claim altogether because of any of the reasons above.

They also sometimes make mistakes.

If your insurer has denied your claim or offered a settlement amount that is less than what you truly deserve to cover your losses, then you have the right to fight back.

If you think that none of the above reasons had occurred and you can prove the case, then your insurance company may reverse the claim denial.

The experienced public adjusters at Capital Claims Group are professionals who work on your behalf and can help you obtain the correct settlement.

Reach out today for a free consultation. You can call us at 954-874-3563 or contact us by email here: contact.