What to Do If Your Homeowners Insurance Claim Is Denied

damaged house treeImagine that you spent several hundred dollars or more on homeowners insurance coverage, just so that you could have a little peace of mind if something went wrong. Now imagine that your insurance company denied your claim after your home was damaged or ruined beyond repair.

Denied claims make your life much more complicated, especially when you don’t have the cash to pay for the repairs on your own. But don’t start thinking of ways you can live with those burst pipes or that tree through your roof just yet. Take a deep breath and read on. There may still be hope.

What You Can Do

Remember, your insurance company is a business. They don’t like to give away money if they don’t have to. They make a habit of denying claims to their loyal customers because they don’t want to be the ones to foot the bill.

If you are the victim of a traumatic incident which has caused extensive damage to your property, you deserve the chance to rebuild your life. Here are some tips that may change the outcome.

1. Review Your Claim

Insurance claims are full of jargon and can be hard to follow. If you can get past the technical and awkward wording, you will find out why a claim was denied. At least, those details should be listed in your policy.

If they aren’t, you shouldn’t simply throw the claim away and vent about paying for the damages yourself. Pick up the phone and call your insurer. They are legally obligated to explain why it was denied.

2. Know Your Policy

Insurers are very thorough when they write their homeowners insurance policies. They want to make sure they have a valid contract that spells out your rights and when you will be given or denied coverage. If your claim was denied, always go back and review your policy. If it was damaged in a fire or other accident to your home, you can get another copy from your insurance company. Once you have the policy in front of you, focus on the following:

  • Review Your Rights. Make sure you review your rights and know if your claim was denied with or without cause. It is possible your claim was simply denied because of a filing error on the part of your insurance company. It is also possible that someone new to the office was responsible for denying the claim without fully understanding the policy.
  • Understand Policy Maximums. Your insurer may have mistakenly limited your coverage to an amount lower than what they were legally required to pay. Again, this is probably due to a filing error or confusion with another policy rather than fraud. Either way, make sure you catch the discrepancy.

Understanding your policy in detail is essential. If you catch a mistake on the part of an insurer, you have a good chance of appealing their decision or taking them to court. You will only have that chance if you take the time to look.

3. Gather Details

If there is a discrepancy with your claim and you feel it was unfairly denied, you may have to prove your case. Before you can file an appeal, gather evidence to support it. The process will vary depending on the circumstances, but you may have to do one or more of the following:

  • Know the facts regarding the incident itself (dates, extent of damage, parties involved, steps you took to prevent the incident and any extenuating circumstances).
  • Request an independent appraisal if their is a disagreement over the value of your home.
  • Take pictures of damages.
  • Show records of any purchases you made to protect your home (such as home fire safety alarms and home security systems).
  • Find witnesses who may speak on your behalf.
  • Document all conversations you have had with your insurance company.
  • Show all evidence that you are a responsible homeowner, and are not liable for any incidents if the claim was denied due to negligence on your part.

The last thing you want to do before you make an appeal is go in unprepared. Remember, tens of thousands of dollars could be at stake.

4. File an Appeal

If you believe your claim was denied without reason and should be covered under your existing policy, you can try to file an appeal with your insurance company directly. They will provide details on how to make an appeal if you wish to do so. An appeal isn’t a guarantee that the decision will be changed, but it is worth a shot.

Make sure you document all evidence to support your claim. Here are a couple of examples of things you’ll need.

  • Photo and Written Documentation of Damages. A picture can speak a thousand words and a written document is very helpful as well. Take plenty of photos of the damage, from multiple angles, and write a clear description of what happened.
  • Any Documentation of Inspections and Maintenance. One of the most common reasons claims are denied is due to negligence or recklessness on the part of homeowners. Do everything you can to prove you are not at fault for any damages in your home. Show that everything was up to code and that you were a safe and responsible homeowner. Whatever their reasoning for denying your claim, make sure that you can support your own position.

If your appeal is still denied, the only option you have left is to take the insurer to court or a private arbitrator. This is something you should seriously consider if you just lost a one hundred thousand dollar home. Make sure you have records of all transactions with your insurance company to back yourself up when you go into the courtroom. Get a good lawyer to support you. They may be expensive, but their fees won’t even compare to the cost of losing your claim.

Final Word

Insurance companies deny claims all the time.  Sometimes they have just cause to do so, but they can make mistakes as well. Whether they make a simple filing error or misread the terms of your policy, you shouldn’t have to be the one to suffer. You deserve restitution if your home has been damaged or destroyed, so make sure you understand your policy and your options before you throw in the towel.

Have you filed a homeowner’s claim and been denied? What steps did you take in response? Share your experiences in the comments below.

  • A. Frazier

    My insurance company approved a claim made a payment then a month later denied it. I’ve already had the work done on my home do I have to return the money? I’m unsure of what to do next.

  • jerzeegurl

    It will be 2 weeks tomorrow since a pipe broke in the wall of my kitchen. My kitchen was flooded. We had the plumber out the next day and he said he would have to have someone come in and remove the cabinets to get to the wall and remove the broken pipes. He had a team come in that he normally works with. They called the insurance company and talked to an adjuster and with 5 witnesses in the house the adjuster said that yes we were covered and that we should go ahead and remove the cabinets. Cabinets removed, asbestos found, new crew for asbestos, thousands of dollars of work done, 5 days later another adjuster came out and we thought she would tell us what was covered and instead she denied our claim. There was a lot of work done that would not have been done if the claim was not approved. This 2nd adjuster stated that the plumber said that it was an ongoing leak and that it was wear and tear so they did not have to cover it. I called my plumber to find out why he had done that when it was clearly a break in order to flood my kitchen and into the next room. He said he never even talked to our insurance company, did not even know who they were. I called her back and she said hmmm then said we will re-open it but it still does not look good and they maybe they could pay for what was done so far minus my deduction. I told her, I have no kitchen cabinets, counters or floor and the floor in the adjacent room has to come out too. She said I could pay for that myself. I am suppose to hear their decision tomorrow. Not sure of my next move if I am denied but I would not have done this if it was not already approved.

  • Detroit313

    There was a record storm in my area on August 11, 2014. Many nearby suburbs were flooded due to being in a flood zone, or because storm drains were turned off. I live miles away from these affected areas.
    However, my home was badly affected. Water came in through my side door. Because of a slope to the property, it was physically impossible for flooding to be the cause of this water entering during this wind, hail and rain event. It is more likely that the water was driven in by wind.
    There was a lot of confusion about this initially because the land next to my home was flooded. But, for water to have entered my home the way it did, water would have had to be 5 feet high in the street, and it wasn’t. If it had been, the entire block would have been flooded, and I was the only one to get this water damage.
    It also went undiscovered that a tree branch had impacted the back of the house the night of the storm knocking out mortar above a basement window well that collapsed, and water that ruined my electric panel. The entire rear wall of my house (interior) either discolored or collapsed.
    The insurance adjuster who came out said to me: “I am only authorized to pay you for sewer back-up rider. Although he inspected that there was other damage, he did not add it to the report. All of my basement mechanics (costing over $12,000 in 2010) were destroyed by water coming in through side door (driven by wind), going down my basement steps, and flooding my sewer floor drain.
    I continued to call Nationwide for weeks. they play phone games. One representative listens to your story, then tells you, “I know exactly what you mean, but you need to speak to Dennis in Indianapolis”. they then connect you to Dennis who listens to your whole story, and tells you: “you really need to speak to John in North Carolina”. It goes on like this into infinity, and I have phone records of over 2000 minutes of call time to this company.
    I did specifically call agent, managers, etc.. They all screamed at me. I read my policy, and questioned wording of “wind related storm damage”, but all reps told me: “i don’t know what your policy says”. There is some pretty standard wording throughout the insurance industry so I think this was just their way of passing me along.
    To date, I have had two other adjusters come to home. Both situations were ridiculous. I am beginning to think that they are trying to frustrate me by not giving any direct answers. I am disabled, a single woman, and have spent $25,000 since this happened just trying to secure structure.
    On September 23, a supposed structural engineer came to home. He activated a laser level without warning, and it got me right in the left eye. The entire experience with this company has been outrageously bizarre.
    I lived for one month with no hot water in my home. My mechanics (furnace, etc.) were all category 3 contamination. The Sewer back-up rider that came with my policy had a blank where there should have been an amount. I am a pretty thorough person, and remember telling the agent what I paid for my mechanics when I added this rider. I was not paid enough to replace them.
    Furthermore, the first adjuster would not right down the proper amounts for my loss even though I had the receipts available. This experience has left me exhausted, broke, and I don’t know what to do.
    I gave pictures prior to the event from an appraisal on June 30, 2014. My home was clean, well maintained, and beautifully updated. It looks like the Adam’s family moved in now.
    I sent a one-hundred page report including pictures and narrative of what happened here to my insurance company, and to the State Insurance Regulatory Commission detailing my experience, and photos of before and after. I suffered for almost 10 days from a bronchial infection, have no functions in my house except hot water, and have lost 12 pounds (I struggle to keep weight on due to one disability).
    These adjusters come to my house, and keep me on my feet for two hours (I can hardly stand being on my feet for 20 minutes), and then, this last Tuesday, I get zapped in the eye with a laser beam.
    If anyone knows of a lawyer who will take my case on contingency, please let me know. I am truly worried that I will end up homeless over this.
    The Insurance company is treating my property as trivial because I live in Detroit, but this house has been extremely updated and cared for. It is the family home I grew up in, and I have taken care of it.
    I guess that is about all although there are many other details about Nationwide’s behavior toward me. I’m just sick from the “treatment”.