Whether it’s due to lack of coverage, lack of documentation, a missed deadline, or some other reason, having a home insurance claim rejected is the last thing you want after spending all that money on insurance. Unfortunately, it does happen—far more often than you’d think. Although it’s frustrating to have a claim rejected, it’s not always the final word.
Let’s take a look at five actions you can take to dispute the decision.
1. Review your policy
In nearly all cases, the best first step when disputing a claim is to carefully review your home insurance policy. You’ll want to confirm whether or not your existing policy actually covers the claim and determine the entitled coverage amount.
Keep in mind that standard home insurance may not cover all situations, such as damage caused by floods and earthquakes. If during the review, you find that your claim was denied in accordance with the policy, then you’ll probably have to cover repair costs yourself. However, if the denial or low approval was a mistake on the insurer’s part, you have other options.
2. Learn more
After reviewing your policy, seek clarification from your agent, insurance representative, or even the claims manager. Specifically, ask why your claim was denied. If your claim was approved for a low amount, ask how they arrived at that figure.
If any language is unclear or if your agent uses a lot of jargon, ask them to explain it more simply until you understand clearly. Only then can you make an informed decision on whether to accept the denial or escalate the dispute.
3. Appeal the decision
Once you’re confident in your understanding of the policy’s terms and feel justified in disputing the claim, contact the insurance company to appeal their decision. Request a reevaluation of your home insurance claim or request a new assessment based on additional information. Adjusters make mistakes just like everyone else, so it’s possible they made an error.
Alternatively, you might want to request a new home inspection. When doing so, it’s crucial to gather all the supporting documentation and evidence you need in advance. For example, if your claim was denied due to negligence, print out receipts showing repairs, upkeep, and maintenance.
Finally, ensure you’re able to clearly articulate why you’re appealing. Without taking an adversarial or threatening tone, write up your reasons in a letter and send it off to the company. Keep a record of when you send it.
4. Reach out to your state insurance department
If your dispute goes nowhere despite the appeal, consider taking the next step: file a complaint with your state’s insurance department. This might provide you with extra leverage for negotiating.
That being said, state insurance departments can’t fix everything. Sometimes, they’re unable to mediate between insurance companies and policyholders for a variety of reasons. However, it’s worth giving it a try.
5. Hire an attorney
If you’ve done all the above and your claim is still rejected, it may be time to hire an attorney. Unlike the above tips, this one won’t be free. Attorneys typically charge a consultation fee alongside an hourly rate for legal guidance.
To ensure the fee makes financial sense, weigh it against two things:
- What you might gain if your claim is approved
- The out-of-pocket expense you’ll lose if your claim is denied again.
Getting a home insurance claim declined is frustrating, but it’s not the final word on the matter. Work through the above five steps to dispute any rejected claim.