What Are Some Reasons Insurance Claims Are Denied?

As a homeowner, it is necessary to protect your home and property in the event of a fire, flood or other disaster. Home insurance is a must if you have to make repairs to your home or rebuild it altogether. It can also help you to cover the cost of replacing any personal property that is damaged or stolen if your home is burglarized. However, insurance companies deny homeowners’ insurance claims all the time. There are a few reasons why this happens.

Deductible

All homeowner’s insurance policies have a deductible that you’re required to pay. If the damage to your home amounts to less than what your deductible is worth, your claim can be denied because it does not meet the amount in question. Generally, most homeowner’s insurance deductibles are around $1,000.

Peril Isn’t Covered

Many homeowners think that their insurance automatically covers any damage to their home. However, that is not the case. If a specific peril that is not included in your homeowners insurance policy is responsible for the damage, your claim will be denied. For example, if the peril that damages your home is hail but you’re only covered for fires and vandalism, the insurance company would deny your claim.

Exclusion Clause

All homeowner’s insurance policies have what is known as an “Exclusion Clause.” This tells you what isn’t covered by your policy. Usually, damage that occurs as a result of disasters like earthquakes and floods are not covered but are things you must add on for an extra cost. For instance, if you don’t have those as an add-on and your home is damaged by a flood, your claim would be denied.

Unpaid Premiums

If you don’t pay your premiums or make late payments toward them, you can expect your claim to be denied. In some cases, this can be overturned when you make an appeal, but the insurance company ultimately has the right to deny a claim in that scenario.

Lying on an Application

The first thing the insurance company does when you file a claim is to thoroughly go through your original application. This is to ensure that everything is legitimate. If anything is found to be exaggerated or out and out fraudulent, the insurance company will deny your claim and revoke your insurance policy. If the latter occurs, the insurance company can end up suing you to recover any prior payments that were made to you.

If your legitimate homeowner's insurance claim was denied, you should immediately contact an attorney to help you seek what you deserve.

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