Reviewing your home insurance policy before a claim occurs can help you understand what types of damage and events are covered by your policy and what is excluded.
When filing an appeal or disputing a claim, it is important to have the right documentation and evidence to support your case.
You may hire an independent appraiser or a public insurance adjuster to provide a professional opinion on your claim dispute.
If you feel your insurer has denied your claim unfairly, you may register a complaint with the state insurance department.
Standard home insurance provides coverage for many types of damage and losses — but not all. A claim could be denied due to lack of coverage, homeowner negligence, missing a filing deadline or not having enough documentation. But what if you disagree with the decision? Bankrate’s insurance editorial team, which consists of licensed agents, shares some steps that might help you learn how to fight a denied homeowners insurance claim or an unfair settlement if you think the insurance company’s decision to deny the claim is incorrect.
How to dispute a denied homeowners insurance claim
There are several potential steps to take when preparing a case to dispute a homeowners claim denial. Much of this you can do on your own, but you may end up requiring help from a third party. However, the first thing to do is review your homeowners policy to see what it says about the circumstances around the claim you filed. Specifically, you’ll want to see whether coverage is specified that would meet the claim and if any specific exclusions would justify the denial.
If you still feel the claim denial is incorrect, you’ll want to assemble and add to your documentation. What you need to document may vary depending on why your claim was denied. Photographs, receipts and even the written inspections of contractors can be useful evidence.
Once you’ve thoroughly reviewed your policy and documented your case, it’s time to speak with your insurance company to let them know you’re disputing their claim denial. If your appeal fails, it may be wise to employ a lawyer or similar legal counsel to assist with moving forward.
Below, we outline in more detail some of the steps you may want to take.
1. Review your claim and coverage
2. File an appeal
3. Get another professional opinion
4. File a complaint with your state’s insurance department
5. Hire an attorney
Terms to know when disputing a home insurance claim denial or settlement
There are a few terms used in claims filing and processing that may be helpful to know up front.
Term Meaning
Appraisal An appraisal is a detailed assessment of either the property or property damage. An appraisal is written by an adjuster to estimate the amount of damage from a loss. The initial appraisal is usually provided at no charge from the insurance carrier.
Mediation Mediation is a meeting between a representative for the insurance carrier and the policyholder. A mediator will facilitate the meeting and both parties will present information regarding the claim. The goal is to find a solution for both parties.
Adjuster An adjuster is a professional hired to evaluate property damage. The adjuster will determine how much damage has occurred to the property. They will also recommend the amount to be paid out for the damage. Adjusters can be hired by the insurance company or by the policyholder.
Covered peril A covered peril is a loss or event that is covered under your home insurance policy. If your home or personal items are damaged by a covered peril, your home insurance policy should provide a payout based on the adjuster’s findings.
Coverage limit This is the maximum amount of money your insurance company will provide in the event of a covered loss. If the claim exceeds your policy’s coverage limits, you might have to pay the difference out-of-pocket.
Settlement A settlement is the payout you receive from your insurance company after a covered claim. It’s calculated based on the adjuster’s investigation of the claim, including what was damaged and the estimated cost of repairs. If you have a deductible, it will be taken out of your final settlement.
Why was my home insurance claim denied?
Although a homeowners insurance policy is designed to provide financial protection in case of damage from a covered event, there are certain circumstances that justify a denied homeowners insurance claim. These include:
Lack of coverage: Homeowners policies do not cover every type of event or cause of damage. Policies have exclusions, meaning damage caused to your home by certain perils is not covered. For example, flood coverage is excluded from most standard homeowners insurance coverage.
Missed filing deadline: There are time limits on when you are able to file a claim. Generally, this time limit could be up to a year from when the incident occurred, but it can vary by insurer and state. Experts recommend filing a claim as soon as the damage takes place and it is safe to do so to avoid missing critical deadlines.
Not enough documentation: If you fail to submit sufficient documentation, such as photos, videos or witness statements, it could result in a denial of your claim. Insurance adjusters rely on the details when making a decision, so the more supporting evidence, the more informed a decision the adjuster can likely make.
Negligence: You are responsible for the upkeep of your home, which includes regular maintenance and repairs. Failure to maintain your home or perform repairs as needed can cause your appeal to be denied if found to have contributed to the cause of loss.
Sometimes, your insurer may not deny your claim outright. Instead, a settlement could come in lower than expected. If this is the case, the same process of examining all related documentation, asking for another review and hiring a public adjuster could be used to dispute a home insurance claim settlement offer. You could also seek the advice of an attorney before accepting a settlement amount.
