Dealing with Denials: How to Challenge Your Home Insurance Claim Rejection

Summary

• This post should provide advice on what to do if a claim is denied. It should cover common reasons for claim rejections, steps to appeal the decision, and when to seek legal advice.

10 Steps Dealing with Denials:

I hope you readers don’t get tired of me saying this, but the best way to avoid denials when an event occurs is to be pro-active, rather than re-active.

I have been on both sides of the denial process, and both can be very cumbersome.

Here are some good points when it comes to experiencing a denial, whether it be on damages to your structure or personal property.

1. Know your policy and what it covers. This is easier said than done! Your policy is a contract between you and the insurance company, so both parties are required to adhere to the provisions of the contract (policy).
2. Read your policy and make notes of what you do not understand. Take the question list to your Agent, and have him answer each of your questions. If he can’t, I would advise maybe finding another agent.
3. Ask your agent a ton of “what ifs”. One good example is, “ What if my house floods from ground water from the outside?”. Normally, that will be a denial, because most homeowner’s policies do not cover flood.
   1. Another might be, “What happens if the sump pump in my basement can’t keep up with the amount of water coming in from the outside street storm drains?”. In this case, you would probably need a back up sewer and drain endorsement. These are just a couple of examples of the many questions you need to ask your Agent.
4. On the onset of a claim event, take as many photos as you can, as soon as you can! Not only take photos of the damage, but take peripheral area photos also.
   1. Example, if your basement floods due to a backup, and you have the endorsement, put a tape measure and show the depth of the water, and take a picture of that. I you have high wind damage, take pictures of the trampoline blown over the fence and shingles on the ground. These practices can prevent a denial.
5. Remember, proof of the loss is your responsibility. So, if you can prove the loss, then the insurance provider has no choice but to pay the claim, as long as it falls within the policy provisions.
6. Let’s go back to your Agent. He can be your best advocate in the case of a denial. With any policy there will be coverage gray areas. This is where your agent can help you immensely in explaining just why you are getting the denial, if your policy provisions do not provide coverage. The may also be affective in overturning a denial, when appropriate.
7. Remember, always make every attempt to not develop an adversarial relationship with the claim representative. Keep it cool and cordial, and if need be, ask to speak to his supervisor. Hopefully, they can give you the exact reason your claim was denied.
8. From my experience, most insurance companies want to pay what is due. Some just interpret the policy more liberally l than others. Also, insurance carriers have strict guidelines on fair settlement practices.
9. If you feel your denial was unfair, and all other avenues have been explored, your final step would be to make an upper management complaint, a Department Of Insurance complaint, or retain an attorney. But, I would advise you to make any of these your last resort.
10. Finally, do not procrastinate on filing a claim. Do it immediately! The longer you wait, the more likely the loss evidence will be harder to find, and a loss can look more like wear and tear, (which most policies do not cover), than sudden accidental damage.

Please remember, take the time to review your policy.  Many of us get the policy in the mail and stick it in an insurance file.  Spend a couple of hours of time and get your questions answered, and do your “what ifs” with your agent.  This is the most proactive way to protect yourself from any denial.

And if something happens, and you make a claim, let your Agent know immediately and explain to him the situation.  He/she knows his carriers claim processes and will be your best advocate in the case of a denial.  A good agent will become invaluable!