Think about this. You just had some major property damage to your home, and you go to file a claim, but your home insurance claim is denied. No money to fix the damages for you! It is one of the worst things to happen besides the property damage itself. Let’s learn why home insurance claims are denied, what to do after you have a denial, and everything there is to know about denied property damage insurance claims.
Why is my property damage insurance claim denied?
There are a few reasons why claims can be denied by your insurance company. It’s important to know these reasons even if you haven’t experienced a denied homeowners insurance claim to prevent them from happening.
Wear and Tear
Insurance claims can be denied due to typical wear and tear. This is the most common kind of denied homeowners insurance claim. This is when there is damage that has been occurring over a long period of time as opposed to damage that happens all at once. This isn’t covered by a standard insurance policy.
For example, let’s say you have an old sewage pipe leaking in your basement, but you didn’t know it was happening since you don’t spend a lot of time down there. One day you do downstairs and see water on the ground and realize what has been happening. Unfortunately, you won’t be covered by your insurance company to fix the damages and your water damage claim will be denied.
Fortunately, sometimes this will only result in partial denial. Your insurance company might not cover the cost of a new pipe, but they might be able to cover the damage it caused (water damage). This would be covered in a standard HO3 special form.
Vacancy
If your property is left vacant for more than 30 days and you have some kind of property damage (fire damage, water damage, vandalism, theft), your insurance company will not cover the damages that occurred.
Equipment Breakdown
Under a standard homeowner’s insurance policy, you won’t be covered for damages that come from equipment breakdown. For instance, you have a power surge that breaks your TV, refrigerator, washer, and dryer. Even though the damages can surpass your deductible in which you would want to file a claim, your insurance company will deny this. Unless you have equipment breakdown coverage which can be added to your policy if you want instances like this to be covered.
Accidental Damage
Damage to your property, even by accident, will be denied. If you’re up on your roof setting up a satellite dish and you step through your roof and create a hole, unfortunately, your insurance company will not cover this and your home insurance claim will be rejected.
Damage from Animals & Pests
If you have animals or pests in your home that cause damage, no matter the size of the damage, you cannot submit a claim for this. You will have to pay out of pocket for these damages.
Having the Wrong Policy
If you have an incorrect policy for your home and how your home is used, your home insurance claim will be rejected. If you are using your home as a rental property and you do not have the proper policy (rental property insurance/landlord insurance), your insurance company can deny your claims. Sometimes they will cover parts of your claim like dwelling and contents but deny loss of income from your tenants. Make sure you get the proper policy to avoid this!
Mold Damage
Although you would typically think that mold is covered in your insurance policy, it depends on the mold. Mold will only be covered if it comes from a different peril (like water damage). If you find mold in your home, don’t call your insurance company. Call a public adjuster first or your insurance company will deny the claim.
Every insurance policy has mold exclusion (limited rot and fungi exclusion). This means that your insurance company won’t pay for mold or rot if it’s just on its own and not from a specific loss. Each policy only covers $10,000 of mold or rot per policy year so if it ends up being covered, they will only pay $10,000, the rest will be out of pocket.
Learn more about mold damage
What to Do If Your Property Damage Insurance Claim Is Denied?
If your claim is denied, we understand the frustration that comes with it. Especially if the claim that you have is expensive to fix the damages. Here’s what what to do if your homeowners insurance denies a claim:
Wrongful Denial of Property Damage Insurance Claim
If you believe that your claim has been wrongfully denied, you should consult a public adjuster to take a look at your policy and the damages that you have at your property. From there, if we also believe your claim is wrongfully denied, we can recommend legal services (an attorney that specializes in denied property damage insurance claims). They will fight for you to overturn the wrongful denial.
Fair Denial of Claims (Not Wrongful)
When your property damage insurance claim is denied fairly, although it’s unfavorable, you will have to pay out of pocket to fix the damages. If this happens, when the repairs are completed you should talk to your insurance agent to ensure that they are to their satisfaction as incorrectly or failing to fix the damages at your home could result in future denied homeowners insurance claims.
How To Make Sure Your Claim Doesn’t Get Denied
The best way to prevent your property damage insurance claim from being denied is to call a public adjuster first. When you hire a public adjuster before you call in your damages to your insurance company, we can prevent you from 2 things: saying the wrong thing to your insurance company that could result in a denial and if we believe your claim will be denied we can deter you from calling them. A denied insurance claim looks bad on your record to your insurance company so it would be best not to call them.
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Other Reasons to Hire A Public Adjuster
Public adjusters can get you the best possible settlement for your claim. They are trained to know the ins and outs of insurance policies so that they can get the most money from your insurance company to fix the damages. Consultations are always free and no-strings-attached, so it’s always worth it to call whenever you have property damage.
