When homeowners suffer property damage, it can be devastating. For that reason, they should be familiar with how to make an insurance claim with their insurer and what to do if they believe their claim has been wrongly denied.
Reasons an insurance claim may be denied
When property damage has been suffered, it is important to report the damage, document the damage and prevent further damage. Insurance claims may be denied for a number of reasons and all of them may not be valid reasons.
- Lack of coverage: the insurance company may argue that the claim in question is not covered by the insured’s insurance policy. Any ambiguities in the policy coverage are judged in favor of the policyholder.
- Application errors: the insurance company may claim that application errors nullify coverage of the policy. The insurer may claim certain misrepresentations on the original application nullify coverage under the policy.
- Claim errors: the insurance company may claim that the insured made errors when notifying the insurance company of the claim. Timelines for reporting a claim under the policy may apply that can be as short as 24 hours.
- Insurance fraud: The insurance company may claim the insured submitted false or exaggerated claims that amount to insurance fraud.
- Bad faith denial: Insurance companies may make bad faith denials of the insured’s claim that can seem complicated or confusing.
Protection offered by insurance law
Insurance law may protect a policy holder when the insurance company:
- has made an inadequate or delayed investigation into the claim;
- refuses to pay the claim when liability is reasonably clear;
- fails to approve or deny the claim in a reasonable or specified timeframe;
- denies the claim with little or no explanation;
- fails to defend a liability lawsuit when the claim is covered by the policy holder’s liability policy; or
- denies a claim based on an application misstatement after the period to contest has passed.
Property owners who are facing damage and a denied claim should be familiar with these protections and the options available to help them.