When and how to fight a denied homeowners insurance claim
Key takeaways
Reviewing your home insurance policy before a claim occurs can help you understand what types of damage and events are covered by your policy and what is excluded.
When filing an appeal or disputing a claim, it is important to have the right documentation and evidence to support your case.
You may hire an independent appraiser or a public insurance adjuster to provide a professional opinion on your claim dispute.
If you feel your insurer has denied your claim unfairly, you may register a complaint with the state insurance department.
Standard home insurance provides coverage for many types of damage and losses — but not all. A claim could be denied due to lack of coverage, homeowner negligence, missing a filing deadline or not having enough documentation. But what if you disagree with the decision? Bankrate’s insurance editorial team, which consists of licensed agents, shares some steps that might help you learn how to fight a denied homeowners insurance claim or an unfair settlement if you think the insurance company’s decision to deny the claim is incorrect.
How to dispute a denied homeowners insurance claim
There are several potential steps to take when preparing a case to dispute a homeowners claim denial. Much of this you can do on your own, but you may end up requiring help from a third party. However, the first thing to do is review your homeowners policy to see what it says about the circumstances around the claim you filed. Specifically, you’ll want to see whether coverage is specified that would meet the claim and if any specific exclusions would justify the denial.
If you still feel the claim denial is incorrect, you’ll want to assemble and add to your documentation. What you need to document may vary depending on why your claim was denied. Photographs, receipts and even the written inspections of contractors can be useful evidence.
Once you’ve thoroughly reviewed your policy and documented your case, it’s time to speak with your insurance company to let them know you’re disputing their claim denial. If your appeal fails, it may be wise to employ a lawyer or similar legal counsel to assist with moving forward.
Below, we outline in more detail some of the steps you may want to take.
1. Review your claim and coverageIdeally, experts recommend reviewing your home insurance policy before you ever have to file a claim to help minimize the risk of a gap in insurance coverage. Knowing what your home insurance covers — and what it doesn’t — can help you financially prepare for what may need to be paid for out of pocket. But if you didn’t do that and now find yourself faced with damage or loss that requires a claim, it will still be helpful if you fully understand what your policy covers.
Look at which perils are included and which parts of your property are covered, check for any exclusions, review your deductible and familiarize yourself with the claim submission process.
If you have already filed a claim and are questioning the insurer’s response, checking the information you submitted is important. Suppose the policy states that it covers the peril that caused the damage, and the policy covers the item(s) damaged by that peril, and no exclusions seem to apply to the situation. In that case, you may have a case for disputing your claim denial.
Ask yourself if you provided adequate supporting evidence and documentation. If you still feel the insurer misjudged your claim, you might consider filing an appeal.Tips when reviewing your coverage
As you are reviewing your policy, you may find it helpful to:
Learn more about how to read your policy.
Write out all the questions you have for your insurance company.
Speak with a licensed agent.
2. File an appealOnce you are confident you understand the way the policy is written and that you have submitted everything properly, you can call your insurance company and ask for your home insurance claim to be reviewed again or request a new examination based on new information. It is possible a mistake was made by your claims adjuster the first time around. If you have any questions about your policy’s coverage, your claims adjuster can help answer those, too.
To file an appeal, having the right documentation is paramount. In general, you may need to show proof of which peril damaged the item, how damaged it was, how well maintained it was beforehand and that you were not responsible for the damage either directly or through negligence.
This may include dates and details of the incident, as well as photos, videos and witness statements, if applicable. If you are filing a claim related to your personal property, a home inventory that includes receipts could be helpful as well.Tips when filing an appeal
If you plan to file an appeal, these tips might help:
Ask for another home visit.
Collect as much documentation and proof as possible.
Explain the reasoning for your appeal in a clearly worded letter.
3. Get another professional opinionIf you have requested a re-examination of your claim and the request was denied or the claim was denied again, then it may be time for another professional opinion. As a consumer, you have the right to hire an independent appraiser or a public insurance adjuster. A public insurance adjuster is not affiliated with any particular carrier and may be hired on your behalf to help you settle a claim. The adjuster should be licensed in the state where you are filing the claim.
When hiring a professional, it’s a good idea to check references and recommendations. You can also call your state insurance department to confirm the adjuster’s record. While a public adjuster may provide useful assistance, hiring one usually comes at an additional cost. Public adjusters may charge up to 15 percent of the settlement claim, and there are no guarantees the claim will be settled.
Hiring an independent party can either show support for the insurance carrier’s original denial or provide support for your claim. If the recommendation made by the public insurance adjuster supports your claim, you could consider contacting your insurance provider and requesting to speak to the claims manager. At that point, you might request the claim be reviewed once again.Tips when contacting an unaffiliated insurance professional
If you do bring in an independent insurance adjuster to help dispute your insurance claim, you may want to keep these tips in mind:
Ask for recommendations from friends or family members who have gone through the process of having a claim denied and seeking third-party help.
Ask for references from the public adjuster and consider checking the Better Business Bureau and your state’s Department of Insurance for reviews and ratings.
Avoid using a public insurance adjuster who goes door to door to solicit business after a catastrophe.
4. File a complaint with your state’s insurance departmentIf you hired a third party and the home insurance claim was denied again or you were offered too low of a settlement, you could register a complaint with the state insurance department. This option may be best if you feel your insurer denied your claim unfairly, and you would like the insurance department to investigate the situation and confirm the insurance company is in the right.
When you contact the department, you may also be made aware of additional resources you didn’t realize were an option. The National Association of Insurance Commissioners (NAIC) has a list of each state’s Department of Insurance, which should have information on how to file a complaint in your state.Tips when filing a complaint
When filing a complaint, experts recommend that you:
Ask the state insurance department if there are any available resources to contact the insurance carrier directly in order to discuss your claim.
The department usually dictates a time limit for insurers to respond to a claim. You can inquire if the insurance carrier responded in a timely manner.
Check the available NAIC consumer resources to see if any other complaints have been filed against the insurer.
5. Hire an attorneyAnother option is hiring an attorney, although this route will have to be paid for out of pocket. Attorneys typically charge a consultation fee and an hourly rate for legal advice, which means the expenses can add up quickly. You will have to balance the cost of an attorney with the end result of having a claim approved — or potentially denied again — and determine if the process is worth it for you.
Terms to know when disputing a home insurance claim denial or settlement
There are a few terms used in claims filing and processing that may be helpful to know up front.
Term | Meaning |
|---|---|
Appraisal | An appraisal is a detailed assessment of either the property or property damage. An appraisal is written by an adjuster to estimate the amount of damage from a loss. The initial appraisal is usually provided at no charge from the insurance carrier. |
Mediation | Mediation is a meeting between a representative for the insurance carrier and the policyholder. A mediator will facilitate the meeting and both parties will present information regarding the claim. The goal is to find a solution for both parties. |
Adjuster | An adjuster is a professional hired to evaluate property damage. The adjuster will determine how much damage has occurred to the property. They will also recommend the amount to be paid out for the damage. Adjusters can be hired by the insurance company or by the policyholder. |
Covered peril | A covered peril is a loss or event that is covered under your home insurance policy. If your home or personal items are damaged by a covered peril, your home insurance policy should provide a payout based on the adjuster’s findings. |
Coverage limit | This is the maximum amount of money your insurance company will provide in the event of a covered loss. If the claim exceeds your policy’s coverage limits, you might have to pay the difference out-of-pocket. |
Settlement | A settlement is the payout you receive from your insurance company after a covered claim. It’s calculated based on the adjuster’s investigation of the claim, including what was damaged and the estimated cost of repairs. If you have a deductible, it will be taken out of your final settlement. |
Why was my home insurance claim denied?
Although a homeowners insurance policy is designed to provide financial protection in case of damage from a covered event, there are certain circumstances that justify a denied homeowners insurance claim. These include:
Lack of coverage: Homeowners policies do not cover every type of event or cause of damage. Policies have exclusions, meaning damage caused to your home by certain perils is not covered. For example, flood coverage is excluded from most standard homeowners insurance coverage.
Missed filing deadline: There are time limits on when you are able to file a claim. Generally, this time limit could be up to a year from when the incident occurred, but it can vary by insurer and state. Experts recommend filing a claim as soon as the damage takes place and it is safe to do so to avoid missing critical deadlines.
Not enough documentation: If you fail to submit sufficient documentation, such as photos, videos or witness statements, it could result in a denial of your claim. Insurance adjusters rely on the details when making a decision, so the more supporting evidence, the more informed a decision the adjuster can likely make.
Negligence: You are responsible for the upkeep of your home, which includes regular maintenance and repairs. Failure to maintain your home or perform repairs as needed can cause your appeal to be denied if found to have contributed to the cause of loss.
Sometimes, your insurer may not deny your claim outright. Instead, a settlement could come in lower than expected. If this is the case, the same process of examining all related documentation, asking for another review and hiring a public adjuster could be used to dispute a home insurance claim settlement offer. You could also seek the advice of an attorney before accepting a settlement amount.
Frequently asked questions
How much does it cost to dispute a home insurance claim?If your homeowners insurance claim is denied, disputing the claim could be a good option. However, it might cost you money. While disputing a claim in itself doesn’t cost anything, you will probably have to pay if you hire a public adjuster or insurance attorney. These professionals often charge a fee that is equal to a percentage of your final settlement, but you should ask about exact costs before hiring someone.
What is a home insurance adjuster?A home insurance adjuster handles claims for the insurance company or policyholder. Their job is to verify the claim details, investigate the loss, look at the damage and estimate repair costs. While a home insurance adjuster usually works for a homeowners insurance company, a public insurance adjuster is a third party that may be hired to perform an independent claim estimate.
How do I dispute a renters insurance claim denial?Disputing an insurance claim denial for renters insurance is like disputing a homeowners insurance claim denial. Consider taking the same steps, which could include reviewing the claim and coverage details, filing an appeal, getting an independent professional opinion, filing a complaint with the state’s insurance department and hiring an attorney.
If my claim is denied, will my insurance rates still go up?It might. Homeowners insurance companies calculate your premium based on multiple
factors, but the one thing those factors have in common is risk—that is, how much of a risk there is that you will file an expensive claim. Filing a claim, even if it is denied, could indicate that you are more likely to file a claim again in the future. Each insurance company has its own unique algorithm for calculating your home insurance rates, so it might be helpful to shop around and get multiple quotes if your premium rises after you file a claim.
