Why Property Insurance Claims Get Rejected: Common Reasons

Michael S. Callahan | | Insurance
Why Property Insurance Claims Get Rejected: Common Reasons

Anyone who owns property faces the risk of damage to that property. Many property owners rely on insurance coverage to protect them if their property is damaged. Unfortunately, all too often property insurance claims are denied. If that has happened to you or a loved one, you may be wondering why the property insurance claims are denied. Often there is no one, definite answer; insurance companies may reject claims for a range of reasons, most usually related to the particular terms and conditions stated in your policy.

Here are some of the most common reasons property insurance claims get rejected:

  1. Damages Not Covered: The damage to your property might not be covered by your specific policy.
  2. Insufficient Evidence: You didn’t provide enough documentation to support your claim.
  3. Late Reporting: You didn’t report the damage promptly to your insurance company.
  4. Failure to Mitigate Loss: You didn’t take reasonable steps to prevent further damage to your property.
  5. Policy Exclusions: The cause of the damage is specifically excluded in your policy.
  6. Non-Cooperation: You didn’t cooperate fully with the insurance company’s investigation.
  7. Deductible Issues: The cost of the damage is less than your deductible.
  8. Misrepresentation: You provided inaccurate or incomplete information on your application or claim.
  9. Lack of Proof of Loss: You didn’t submit a Proof of Loss form, a formal statement detailing the damage and estimated repair costs.
  10. Examination Under Oath Issues: You failed to comply with the insurer’s request for an interview under oath.

Although negotiating the world of insurance claim denials can be taxing and demoralizing, knowing these typical causes of rejection will enable you to better defend and preserve your rights.

Understanding Property Insurance Claim Denials: Common Rejection Circumstances

Having property damage stresses you enough. It might feel like a double hit, though, when your insurance claim, your financial lifeline in a crisis, is refused. The Callahan Law Firm is aware of the emotional and financial cost this might incur and is here to help you navigate an insurance claim denial with ease.

Claim rejections have complicated causes that depend on your policy and particular circumstances. Many policyholders find themselves bewildered and uncertain of their next action on this bewildering terrain.

Understanding the typical mistakes and possible obstacles in the claims process helps you to be more ready to meet any unforeseen difficulty. This information can help a sometimes overwhelming situation become controllable.

10 Reasons Why Property Insurance Claims Get Denied

Denials of a property insurance claim might arise for several different reasons. Sometimes your particular coverage does not cover the cause of the loss..

Other instances, rejection results from a basic misreading or missed detail. This can cover everything from missed deadlines or documentation to disagreements on the degree of the loss or the cause.

Remember, the main objective of the insurance company is to reduce the amount it pays out in claims. Although they should treat your claim properly, keep in mind they are not always on your side. Here’s where we fit in.

A more seamless, more effective claims procedure starts with an awareness of the causes of claim denials.

Failure to Give Timely Notice of a Claim

The moment you discover damage to your property, time becomes a critical factor. Insurance policies often require prompt reporting of a claim to ensure a smooth process.

Delays can raise red flags for insurers, potentially leading to claim denial. Don’t hesitate to contact your insurance company as soon as possible.

Provide a detailed account of the incident and the resulting damage. A timely report demonstrates your proactive approach and commitment to resolving the issue.

Damages Not Covered Under the Insurance Policy

Coverage limitations and exclusions within your insurance policy are common, so it’s essential to have a good understanding of what your policy does and doesn’t cover.

For instance, water damage caused by a burst pipe might be covered, while damage from a flood might not be. Carefully review your policy to understand its scope and any exclusions that might apply.

If you’re unsure, don’t hesitate to seek clarification from your insurance provider or an experienced attorney.

Failure to Protect the Property from Further Damages

Imagine this: a storm damages your roof, but you delay repairs. A subsequent rainstorm causes further damage due to the unrepaired roof. In such cases, the insurance company could deny or reduce your claim.

It’s your responsibility to take reasonable steps to prevent further damage to your property. This might involve temporary repairs, securing the property, or relocating belongings.

Document these steps and any associated costs, as they could be factored into your claim.

Failure to Provide a Timely Proof of Loss Form

A Proof of Loss form is a formal statement that details the damage to your property and the estimated repair costs. It’s a crucial component of the claims process, and its timely submission is often a requirement for claim approval.

The form typically includes information about the incident, the extent of the damage, and supporting documentation, such as photos and repair estimates. Take care when completing this form; accuracy and completeness are key.

Failure to Provide Requested Information or Documentation

Insurance companies rely on evidence. When you submit a claim, the information and documentation you provide form the backbone of your case. Accurate and complete information is essential, as any discrepancies can raise doubts and potentially lead to a denial.

Keep meticulous records of all communication with your insurer, including phone calls, emails, and letters. Organize photos, repair estimates, receipts, and any other relevant documents in a clear and concise manner.

This demonstrates your diligence and provides the insurer with the necessary information to evaluate your claim thoroughly. Remember, a well-documented claim is a strong claim.

Damages Not Exceeding the Policy Deductible

Before filing a claim, consider your policy’s deductible — the amount you agree to pay from your own pocket prior to your insurance kicking in.

If the damage to your property is less than or close to your deductible, it might not be financially beneficial to file a claim. Multiple small claims can also raise red flags for insurers, potentially impacting your future premiums or insurability.

In such cases, it might be wise to cover the repair costs yourself. However, if the damage exceeds your deductible significantly, filing a claim is usually the right move. If you’re unsure, consult with an insurance professional to weigh your options.

Not Cooperating in an “Examination Under Oath” or “Recorded Statement”

In some cases, your insurance company might request an examination under oath (EUO) or a recorded statement. This is a formal interview where you answer questions about your claim under oath. While this process might seem intimidating, it’s important to remember that you have rights.

Before agreeing to an EUO, consult with an attorney to understand the process and prepare for the interview. An attorney can help you with this requirement while protecting your interests and ensuring your rights are upheld.

No Inventory of Damaged Personal Property Provided

If your personal belongings were damaged alongside your property, documenting those losses is crucial. Create a detailed inventory of the damaged items, including descriptions, estimated values, and any supporting documentation, such as receipts or photos.

This inventory helps you substantiate your claim for reimbursement and ensures you receive the compensation you deserve.

Cause of Damage Not Covered Under the Insurance Policy

Insurance policies typically exclude certain types of damage. These exclusions can vary depending on your location and policy type.

Common exclusions include flood damage, earthquake damage, and damage caused by neglect or intentional acts.

Before filing a claim, review your policy carefully to determine if the cause of damage is covered. If you’re unsure, consult with an insurance professional for clarification.

Failure to Cooperate in the Investigation of the Claim

Insurance companies have the right to investigate claims to ensure their validity. This can involve inspections, interviews, and requests for additional documentation.

While it’s understandable to feel frustrated by this process, cooperation is key. By providing the requested information promptly and honestly, you demonstrate your good faith and commitment to resolving the matter.

However, cooperation doesn’t mean relinquishing your rights. If you feel uncomfortable or pressured during the investigation, don’t hesitate to seek legal counsel. An attorney can help you with the process, protect your interests, and ensure your rights are respected.

Seeking Legal Support for Denied Claims

If your property insurance claim is denied, remember that you have options and don’t have to accept the denial as the final word. An experienced attorney can review your case, assess the reasons for denial, and determine the best course of action.

They can negotiate with the insurance company on your behalf, file an appeal, or even pursue legal action if necessary.

At The Callahan Law Firm, we are experienced in property insurance claim denials. By understanding the intricacies of insurance law, we’re able to address the tactics insurance companies might use.

Our dedicated team is committed to fighting for your rights and helping you obtain the compensation you deserve.

Don’t Let a Denied Claim Derail Your Recovery

Dealing with property insurance claim denials can be challenging, but understanding the common reasons for rejection and your options can empower you to move forward.

Remember, a denied claim isn’t always the end of the road. By seeking legal support, you can level the playing field and fight for a fair resolution.

If you’re facing a denied claim, don’t go through it alone. The Callahan Law Firm is here to help. Contact us today for a no-cost consultation and let us put our experience and experience to work for you.