angry man in grey suit pointing a banana7 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. Understand your policy helps prevent denied claims and gives confidence in actions to repair your home.

  1. 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 seven years in prison. It's always best to be as detailed and accurate as possible with your claim - keeps you out of trouble and helps ensure your claim gets approved.
     
  2. The damage is not 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-ons like mold and water backup damage that are not covered unless you pay an additional premium. Other types of damage not included unless you pay extra:

    home insurance common coverage add-ons

    Some perils require separate policies for coverage, like flood damage. If one of these perils damages your house and you don't have coverage, expect a denied claim.

    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 types of damage that not covered in any situation. A few of these events are ground movement, war, and nuclear hazards. If war or rioting broke out and your house was damaged, you would be unable to file a claim. Here are some standard exclusions:

    home insurance common coverage exclusions

    Neglect is a significant 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 can result in a $0 payout. Always do what you reasonably can to protect your house after any disaster.
     
  3. 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 home 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 of normal wear and tear.
     
  4. Identifying the correct cause of damage and reporting it
    Many claims get rejected because they are misreported by the person filing the claim. It is essential 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 loss is uncertain, the carrier may reject the claim.
     
  5. 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 crucial 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.
     
  6. 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. Pay special attention to your deductible for wind/hail claims or hurricane claims as they can have separate hidden deductibles.

    dr house oops GIF
     
  7. 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 staying 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.

I hope that's helpful!

At your service,
Young Alfred