When Benjamin Franklin famously said, “Nothing is certain except death and taxes,” he forgot to mention insurance. We buy and rely on insurance as a safety net in life’s worst moments – fire, flood, theft, or extreme weather. Insurance should help to rebuild or replace our precious assets and quality of life. Having your insurance claim denied is costly and heartbreaking, so it’s important to know the top reasons insurance companies state that they are denying claims before you file one. 

Top Five Reasons Insurance Companies Deny Claims

  1. Not filing on time – Insurance policies require claim submittals within a specific time frame. You might be tempted to put off filing a claim, but it’s best to file as quickly as possible. Even if you are still in the process of investigating the damage, file the claim before the investigation concludes if need be. Check your policy information to confirm claim deadlines, so you don’t miss a due date. 
  2. Falling behind on payments – Your insurance policy must be in good standing and active to receive coverage. These days, insurance companies allow different methods of payment, making it easier than ever to submit your payments on time.
  3. False or questionable claims – Insurance carriers typically send an adjuster to review and confirm details regarding a claim. They will compare the adjuster’s assessment with the information in the original claim documentation. They will often reject a claim when there are discrepancies between claim descriptions, documentation, and an adjuster’s review. 
  4. Insufficient documentation of the damage – It’s a two-way street once you file a claim. Insurance companies require sufficient and detailed documentation, including photos. They won’t take your word for it, so provide photos and thorough information. Accurately describe the damage or situation and supplement your claim with pictures to increase the likelihood of claim payout.  
  5. Exclusion clauses – Know what your policy covers and doesn’t cover, especially in areas prone to extreme events such as hurricanes, flooding, and forest fires. Know what your coverage descriptions mean to avoid mistaken assumptions. For example, “water backup” might sound like flooding is covered, but “backup” coverage is limited to damage resulting from a sump pump or sewage drain backup. Read your policy, know your coverage specifics, and adjust or find a different provider if you’re not covered for a specific problem.  

Standard Policy Exclusions You Might Think Are Covered

Given that many policyholders haven’t read every word of their policy, we added a list of the commonly excluded perils from a standard policy. A few might surprise you: 

  • Flooding
  • Earthquakes, landslides, and other ground movements
  • Termites, rats, and other infestations
  • Mold
  • Aggressive or dangerous dogs
  • Poor maintenance or neglect
  • Power surges or outages
  • Home-based businesses
  • Local building ordinance or law requiring you to bring your home up to code
  • Intentional damage caused by you or another resident family member
  • Nuclear hazards
  • War
  • Government action

Insurance coverage can provide peace of mind after an unforeseen and devastating event by helping to replace or restore lost or damaged property. Having your claim denied is costly, frustrating, and makes matters worse. Know why insurance companies justify rejecting claims before you file one and save yourself the heartache (and headache).  If your claim is denied and should be covered by your policy, finding a property claims attorney is a great option.  Our team of property claims lawyers can help you recover from property loss or damage. Contact us to discuss how we can help.