Accidents concerning your home can be a scary situation, often shaking your family’s sense of comfort and security. It can be even more frustrating and stressful to have a home insurance claim denied, especially if the damages to your home are expensive.
There are many reasons that a home insurance claim may be denied.
The Accident Isn’t Covered
Like any other insurance policy, home insurance has certain limits and exclusions. It’s crucial to ask your insurance agent about the limitations on your home insurance policy. Common exclusions include:
- Flood damage
- Earthquake damage
- Intentional damage
- Sewer damage
- Criminal acts
If damage to your home or lawsuit against your family occurs due to one of the above, your home insurance claim is likely to be denied.
False Claims
Keep in mind that an underwriter from the insurance provider investigates claims for validity and to determine how much compensation, if any, the homeowner will receive. If an insurance provider believes a claim to be false, the claim will be denied.
A red flag for a false claim can vary. Intentional damage filed as accidental is a false claim, as is passing off an injury as an accident that occurred on the property when it didn’t, etc. Too many false claims or red flags can lead to not only denied claims, but a cancelled home insurance policy.
Damage is Caused by Normal Wear and Tear
Normal wear and tear is also not covered under basic home insurance policies. For example, say a heavy storm causes a leak in your roof, which leads to damaged areas on the roof and floor. When an inspector considers the damage, they discover that the roof is outdated. Since it’s the responsibility of the homeowner to maintain the property, an insurance claim regarding the outdated roof will probably be denied as a case of negligence.
Damage Is Less Than the Deductible
Your home insurance deductible is the amount you will pay out of pocket after an accident occurs before receiving compensation. When an accident happens involving the home, it’s always important to have a professional assess the damages and provide a quote for repairs. This is because, if the damage done costs less to repair than the price of your deductible, any claim is likely to be denied. It is also more cost-effective to fix small damages out of pocket if they cost less than your deductible.
On the other hand, if the price of your deductible is substantially lower than the quoted cost of damages, you will likely want to file an insurance claim. For home insurance, deductibles are usually around an average of $1000 for personal belongings.
Keep in mind that if an accident involves liability with another person, it’s almost always a good idea to file an insurance claim regardless.
Damage Exceeds Your Coverage
On the opposite side of the damage being too small, some claims may be denied if the damages to a home go beyond the limits of your insurance policy. Home insurance limits vary depending on the home and policy. For dwelling insurance, it’s recommended that homeowners carry at least 80% of their home’s total replacement value in home insurance.
As you and your family grow and change, you may need to reflect on your policy. Any changes or updates you make to the home should be reported to your home insurance provider. Not only can updates raise the value of the home and thus the amount of home insurance needed, but certain safety updates can also lower your home insurance premiums by lowering the likelihood of a claim.
Missing the Filing Deadline
Most home insurance policies have deadlines in which you must file a claim after an accident. Policies typically give somewhere between 180 days and a year for homeowners to file a claim after an accident. As soon as an incident occurs, make sure to document the moment, have the damage evaluated and notify your insurance provider.
Not Paying a Home Insurance Premium
Missing a payment on your home insurance policy isn’t a huge deal in itself as long as it’s rectified, but things can get complicated when you want to file a claim on your home insurance. Not paying your premiums on time can lead to denied claims, hurt credit and higher home insurance premiums. If you miss enough payments, an insurance provider may drop you.
Be sure to speak with your insurance provider to make sure your home and safety are covered, no matter what.