What To Do When Your Homeowners Insurance Claim is Denied
Every day, homeowners insurance claims are denied, either by mistake or sometimes for causes no one comprehends. Suppose you have suffered an insured property loss, and your insurance company has rejected your complaint.
In that case, you have some options to confront your homeowners' insurance claim refusal. This includes talking with a specialized lawyer, among many other things.
Denied Insurance Claim
Insurance policies are legally binding agreements. All homeowners' insurance policies include exclusions and coverage situations that the insurer will strictly apply against the insurance company. And insurance companies are experts at drafting contracts to cut their culpability. The following are some of the more frequent reasons for home insurance complaint denial:
- The property damage is of a form not coated by the policy. For example, a natural catastrophe policy that covers storm-related rain damage but not winds damage.
- The policyholder did not inform the insurance company of the destruction on time or otherwise did not fulfill a coverage premise.
- The policy term expired before the damage occurred.
If your insurance provider does not give you an official note explaining their reason for rejecting your claim, the claim isn't officially denied. The letter that you receive might discuss the wording in your plan that defines the claim refusal.
Read the letter cautiously and evaluate their reasoning for your policy understanding. You can't do anything if your claim is rejected for a legit reason, such as the premium not being compensated or the form of loss (peril) being explicitly exempted from your coverage.
If, after contrasting their clarification to your understanding, you still think your property damage should be compensated, talk to your insurance company's claims adjuster and, if you have one, call your agent immediately. It is difficult to persuade a company insurance agent to overturn a claim denial. Don't give up if you can prove that your homeowners' insurance policy isn't respected.
Make An Appeal
Your homeowner's insurance policy outlines the appeal system that you must follow. If explaining your case to your insurance firm's claims adjuster does not yield any results, you must submit an official appeal. You only have a certain amount of time to complete this task. Your rejected claim is also the moment when the clock starts ticking for your legal alternatives/options.
When you file a formal appeal, your claim receives a second evaluation. You should include as much proof and paperwork as possible with your request to support your claim. This will be helpful for compensation purposes. The more structured you present this data, the more likely you will receive a complete examination of your denied claim.
The state insurance department may tell you to employ an attorney, but it will not pay for it. As a result, it is critical to weigh the costs and advantages of legal action. You must find an attorney who deals with home insurance claims and present your case.
If an insurance provider refuses to respect its contract agreements, despite the presence of your lawyer, you should take it to court. In many cases, the mere threat of a lawsuit will force the insurance company to negotiate a claim settlement. Yet, each case is unique, so you should consult with a qualified attorney before taking any steps.
Think About Mediation
What mediation entails is hiring an impartial individual, or conciliator, to work immediately with you and an insurance company to help you reach an agreement.
Unless your policy or state law requires your insurer to pay, you and your insurer could divide the cost of mediation. The court can appoint a mediator or a private expert chosen by both parties and could also resolve the dispute. You can also go through a state-sponsored mediation plan, which you can generally find on your state's insurance department website.
Settlement is typically quick, but it is nonbinding, so you or your insurance provider can assume the whole thing never happened if either party is unhappy with the outcome.
One disadvantage is that the insurance company's representative will undoubtedly be trained for the procedure. In contrast, you will be completely unfamiliar with it. Your insurer may also use the settlement to determine the viability of your case. You may waste time and money while getting no closer to a solution.
This is why the best strategy is to consult with a lawyer that can properly evaluate, document, and present your case. This way, you might also receive the compensation that you deserve.