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Can Your Insurance Claim Be Denied?

Home insurance is highly important for homeowners for several reasons for example it protects their property from any damage caused by fire, whether and theft. It also covers liability which protects them if someone is injured on their property. When buying a new home mortgage lenders demands it and in general some states may legally mandate it especially in disaster prone areas.

What could be the reason an insurance company rejects your claim?

There are nine reasons where an insurance company can deny your claim.

No Coverage

Home insurance policies my have specific things they won’t cover for example standard policies typically exclude damage from floods, earthquakes and specific kinds of deterioration. If your claim involves one of these exclusions and you don’t have additional coverage your claim will likely be rejected.

Too Much Damage

Every policy has a coverage limit which is the maximum amount the insurance company will pay for any damage. If the cost of repairing exceeds this limit the insurance company will reject the claim or only pay the limit amount.

Forgot to Pay

Insurance only works if you keep up paying your premiums. If you miss payments or your policy expires you are not covered anymore.

Intentionally Wrong Information

Being honest and accurate when you apply for insurance claim is crucial. If you provide incorrect or incomplete information the insurance company may reject your claim for example if you say your home has a security system when it doesn’t the insurance company will find out and immediately deny your claim.

Late in Report

Insurance policies usually require you to report claims immediately and if you wait too long to file your claim it can be denied. The reason for this is that delaying reporting can make it harder for the insurance company to investigate and verify the damages.

Didn’t Try to Prevent Additional Damages

Insurance policies often include a duty to reduce damages which means that After an incident you’re supposed to take reasonable action to prevent further damage from happening and if you fail to do so the insurance company may refuse to cover any additional damages.

Construction Changes

If you make significant renovations to your home without informing your insurance company it can affect your coverage. Major changes may increase the risk of damage or higher repair costs. The insurance company needs to know about any change you plan before you actually make it.

Old Damages

Home insurance is meant to cover unexpected sudden damages. If the damage was already there before you bought the policy it won’t be covered. Insurance companies typically investigate any claim to understand whether the damage is new or older than your policy.

Broke the Rules

Insurance policies come with conditions and requirements that homeowners must comply for example you may be required to maintain some basic security measures and if you fail to meet these conditions the insurance company may deny any claim.

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