What to Do If Your Home Insurance Claim Is Denied
Having a home insurance claim denied can be frustrating, but it's not always the end of the road.
In many cases, you can dispute your insurance company's settlement offer by providing more evidence or filing an appeal for a better settlement.
How to dispute an insurance claim
Find Cheap Homeowners Insurance Quotes in Your Area
Can you dispute an insurance claim?
In many cases, you can fight a denied home insurance claim.
However, before you do, you should understand that there are some legitimate reasons the insurance company may have denied your claim.
Common reasons why home insurance claims are denied
Homeowners insurance doesn't always cover everything that can damage your home. For example, most policies don't cover damage caused by earthquakes or weather-related flooding, including storm surge.
Home insurance doesn't typically cover normal wear and tear, either. So if your roof tiles start to crack because they're very old, insurance probably won't pay to replace them.
You wait too long to report the damage.
Many times, homeowners insurance policies give you a set window of time in which to file a claim after damage. If you don't file your claim within that time period, the insurance company will probably deny it.
This isn't always intentional on your part. For example, say a pipe bursts under your home and you don't notice the damage for six months. Your insurance company may deny your claim because you didn't fix the leak and report the damage right away.
You didn't fix a problem with your home, and it caused additional damage.
Insurance policies don't cover damage caused by neglect. For instance, say you've had a dead tree on your property for a few months. If a storm comes and causes the tree to fall on your home, the insurance company may argue that you neglected to have the tree removed in a timely manner.
How to fight a denied homeowners insurance claim
If you believe the insurance company wrongly denied your claim, or didn't offer you enough money to fix the damage, you can dispute the claim.
What to do if your claim is denied
Step 1: Review your claim and policy
The first thing you should do after a denied claim or low settlement offer is review the claim you initially filed.
Consider whether you can add more evidence of the damage or loss, which can have a huge impact on the settlement. Additional photos or a more detailed repair estimate could help get your claim approved or increase your payout.
It's also important to review the denial or settlement letter, which should explain why the insurance company denied your claim. This can help you understand how to move forward.
If your claim was denied outright, review your policy documents to make absolutely sure your insurance policy covers the type of damage you experienced.
For example, many companies pay to remove mold only if it’s caused by something covered under your policy.
So if wind blows shingles off your roof, causing it to leak, and that in turn causes mold, your insurance company should cover the mold removal. However, if mold grows in your home after flooding from a hurricane, insurance probably won't cover it.
Step 2: Contact your insurance agent or company again
After looking over your initial claim, call and speak to either your agent or the company's claims department about the adjuster's estimate. Remember, an adjuster from the company calculated the estimate, not your agent or the person who answers your call.
If you have new evidence, such as a more detailed repair estimate, you can ask the insurance company to review your claim again.
You can also request that a different adjuster reexamine the damaged property.
The company might review it again, but that doesn't mean the settlement offer will change. It may not even agree to an evaluation by another adjuster. If that's the case, the next step is to get a third-party appraisal.
Step 3: Get an independent appraisal
An independent appraiser or public insurance adjuster will give you a repair estimate for the damage to your property, which could be very different from the insurance company's findings.
A second estimate will either confirm your insurance company's settlement offer or support your argument for disputing it.
If the result is in your favor, contact your insurance agent or claims department again and provide them with the independent estimate. You may want to ask to speak to a claims manager and have them evaluate your case.
Private appraisers or adjusters cost roughly $200 to $500.
If the difference between the claim settlement offer — or the denial — and the amount you need to fix your home is about equal to the cost of the appraisal, it may be more cost effective to take the settlement.
Step 4: File a complaint and hire an attorney
Claim disputes rarely make it to this stage.
If you're unable to reach an agreement with your insurance company and the previous options didn't work, there are only two other things you can do: file a complaint with the state and speak to an attorney.
First, you should report what you believe is mistreatment or bad business practice to your state insurance department. It should investigate your claim and give you advice on what to do next. The department typically evaluates your complaint, then reaches out to your insurance company to encourage a fair resolution.
The state insurance department might suggest hiring an attorney, but it doesn't help pay for that expense. So it's important to weigh the cost of hiring a lawyer and the potential benefits of legal action.
You typically need to pay a consultation fee, along with whatever additional rate the lawyer charges.
Some lawyers will bill you by the hour, while others may offer to take a portion of your insurance settlement if you win your case. Make sure you understand the fees before hiring an attorney so you're not surprised by a big bill at the end of the process.
Disputing natural disaster claims
Most insurance companies handle natural disaster claims the same as any other claim — as quickly and accurately as possible.
However, disasters often lead to lots of claims at once, which can make it challenging for insurance companies to respond quickly.
For this reason, state insurance departments usually require insurance companies to confirm when a claim has been filed by a specific date. Typically, the cutoff is 15 days, but it may be longer after a disaster.
Processing many claims at once might also force insurance adjusters to make rough estimates. If this occurs, the insurance company should notify you, and you can expect a second visit from an adjuster at a later date. Make the second appointment during the first one if you can.
Frequently asked questions
What happens if a homeowners insurance claim is denied?
If the insurance company denies your claim, you should start by reviewing the denial to understand the reason. If you didn't provide enough evidence, you can try sending more photos or videos of the damage or getting a detailed repair estimate from a local contractor. You can also pay for an independent appraisal, report the insurance company to your state's insurance department or hire a lawyer to fight the denial.
How long do I have to file a home insurance claim?
You should file a home insurance claim right away. Once you notice damage to your home, check your policy to make sure it's covered. Insurance companies often set a time limit for how long you have to report damage, but this varies by company and the type of damage. Either way, waiting to file a claim may result in a denial if you hold off for too long.
Can I dispute a claim denial without a lawyer?
Yes, you can fight an insurance claim denial without hiring an attorney. First, review the denial letter to better understand the insurance company's reasoning. You may be able to get your claim approved simply by providing more evidence, such as additional photos.
You can also hire a private adjuster to provide a second estimate of the damage. If that doesn't work, consider filing a complaint with your state's insurance department, which can act as an intermediary and help you get a fair deal from the insurance company.
Editorial Note: The content of this article is based on the author's opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.