One of the primary advantages of homeowners insurance is the peace of mind you have, knowing that you’ll be financially protected in the event of unexpected circumstances. However, there are certain reasons a carrier may deny your insurance claim. Fortunately, many of these situations are easily avoidable if you’re well-informed. In this article, we’ll explore eight common reasons homeowners insurance claims can be denied and discuss how you can keep your investment and assets protected with the help of SelectQuote.
What are some reasons homeowners insurance claims get denied?
There are several reasons why homeowners insurance carriers may deny a claim. Understanding these reasons can help homeowners take proactive measures to avoid these circumstances if possible. Some common reasons for homeowners insurance claim denials include:
1. Not Enough Information
As the homeowner, it's your responsibility to file and prove your claim. Not only should you try and supply detailed documentation of the damage to your property, but you should also do your best to do a complete inventory of valuables on or in your property prior to the loss. If you don’t have this inventory, creating one and storing it in a safe place (either as a physical copy in a firebox or digitally via the cloud) is a good idea to streamline any future claims.
2. Taking Too Long to File
If you take too long to file a claim, there’s a greater chance it will be denied. Policies typically contain time-sensitive requirements for filing the claim and documenting damage, so it’s important to take note of your policy’s time limit for filing claims as soon as you get coverage.
3. Late Payments
If your premium payments are late, it could result in lapses in coverage. When this happens, you’re running the risk of property damage occurring at a time when your home is technically not covered under your insurance policy. Whether you decide to have a recurring calendar reminder or automatic payments, it’s important to try and make sure your payments are on time so your policy remains in effect. Note: carriers may offer a discount on your coverage by setting up auto-payments.
4. Threat of Fraud
Insurance carriers will often send their own claims adjuster to investigate claims and protect themselves against insurance fraud. Anything that raises questions—whether in the claim or in your initial application—can be a cause of denial. This is just one reason why it’s important to be as detailed and accurate as possible when filing your claim.
5. Claim Type Not Included in Coverage
There’s a chance your basic homeowners policy doesn’t cover the entire house and all of your belongings. Common policy "exclusions" include earthquakes, floods, water or sewage backup, or other regional risks. You’ll want to have a complete understanding of what your policy includes and excludes at the time of purchase, as there are many additional coverages, including umbrella insurance, that can be added to your policy to help fill gaps in your coverage.
6. Damage Doesn’t Exceed the Deductible
Your home insurance deductible is what you pay before your insurance coverage kicks in. When a covered loss occurs, you’re required to pay the deductible before the insurance company contributes towards the remaining expenses. If the estimated loss is below your deductible level, then your insurance company likely won’t pay anything on the claim.
7. Someone (or Something) Else Was at Fault
If it was your contractor's negligence that collapsed the foundation or your neighbor's tree that totaled your SUV, your insurance company isn't necessarily responsible for the damage from such an incident. In these instances, you would want to work with the insurance companies of those third parties to recoup lost damages.
8. Damage from Wear and Tear
You have homeowners insurance to protect your assets from damages that are out of your control, but what you can control is how you maintain your home. If a claims adjuster finds evidence of poor maintenance or damage that’s a result of normal wear-and-tear, there is a chance the claim will be denied.
Home insurance is one of the best ways to protect one of your most expensive assets. Taking the time to understand your home insurance policy is key to making sure you have coverage when you need it most. By understanding when a carrier may deny your claim, you can take the necessary steps to prevent these circumstances as much as possible.
Protect Your Home and Assets with SelectQuote
Having the right coverage is one way to ensure your home is financially protected in a variety of circumstances. At SelectQuote, we’re here to make shopping for home insurance easy. Our licensed insurance agents can help you compare rates from several of the most trusted carriers in the nation in just minutes. We can answer your questions, explain the details of your policy, help you find opportunities for discounts, and more.
