7 Reasons Why Home Insurance Claims Get Denied
7 Reasons Why Claims Get Denied
Dealing with damage to your property is frustrating enough. So when your insurance claim gets rejected, it drives even a sane person to blow a gasket. There are several reasons claims get denied, and some of them are easily avoidable. Understanding your policy is vital if you want to avoid having your claim denied so you can quickly repair your home.
- Misrepresenting the Damage
Lying or being intentionally misleading regarding the true extent of the damages done to your property is a definite no-no. Not only will your claim be denied, but you could be liable for up to $15,000 in fines and 7 years in prison. It’s always best to be as detailed and accurate as possible with your claim. This will keep you out of trouble and help ensure your claim gets approved.
- The Damage Isn’t Covered
Your homeowners insurance doesn’t cover every type of damage. Fire, lightning, and wind damage are examples of standard covered perils. But there are many optional add-on like mold and water backup damage that are not covered unless you pay an additional premium. Other damages not covered unless you pay extra:
Some perils require separate policies for coverage, like flood damage. If one of these perils damages your house and you don’t have coverage, your claim will be denied.
Keep in mind that liability can also muddle up claims. For instance, if an electrician miswired the electrical outlets in your house and caused a fire, then his business would most likely be held liable for the damages instead of your homeowners insurance policy.
Every policy has exclusions, or events that aren’t covered under any situation. A few of these events are ground movement, war, and nuclear hazards. If war broke out and your house was damaged as a result, you would be unable to file a claim. Here's some common exclusions:
Neglect is a very important exclusion to note as well because it’s easily preventable. If your house is damaged and you fail to take proper actions to prevent further damage, your claim could be denied. This is why it’s always important to do what you reasonably can to protect your house after any damage.
- Damage from Wear and Tear
Houses are built to last, but that doesn’t mean that they are impervious to the effects of time. Whether your house has an old roof in need of repair, rusty pipes, or a room that needs recarpeting, your homeowners insurance won’t cover damage that comes as a result from normal wear and tear.
- Identifying the Correct Cause of Damage and Reporting it
Many claims are rejected because they are misreported by the person filing the claim. It is important to understand the correct peril that caused the damage so that the claim is evaluated accurately by the insurance carriers. At times, if the exact cause of the damage is uncertain, the carrier may reject the claim.
- Missing the Deadline to File a Claim
If you’re not careful, you could have your claim denied because you failed to file on time. It’s very important to start your claim process as soon as possible to ensure coverage. Deadlines can vary between 180 days to a year depending on your insurance policy. Knowing how much time you have to file is vital to ensure your claim doesn’t get denied.
- The Damage Doesn’t Exceed the Deductible
Perhaps the most common reason for a denied claim is that the damage simply isn’t expensive enough for a claim. If you have a $1000 deductible in your homeowners insurance policy, and a burst pipe costs $900 to fix, then your insurance wouldn’t pay anything on the claim. You have to pay the deductible first before your insurance company covers the damage. This is even more common on wind/hail claims or hurricane claims that can have separate hidden deductibles.
- Not Paying the Premium
Sometimes homeowners will forget to pay the premium, causing them to lose coverage when they need it most. It’s essential to make sure you pay your premiums on time so that your house remains protected. Aside from remaining covered, there are other reasons to pay your premium on time. Missing payments can lead to a damaged credit rating and even more expensive premiums in the future.
Hope that's helpful!
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