Denied Home Insurance Claims – Discovering that your home insurance claim has been denied can feel like a cold shower, leaving you not only dealing with the stress of damage or loss but also facing unexpected financial burdens. Understanding how claims work, the complexities behind settlement decisions and how to address them is vital for any homeowner. This comprehensive guide is designed to shed light on common reasons for home insurance claim denials and outline actionable steps that policyholders can take if they find themselves in the same position.
Denied Home Insurance Claims – Fast Facts:
Home insurance stands as a pillar of protection for one’s residence against unforeseen damages and losses. However, the journey from submitting a claim to receiving compensation isn’t always straightforward. Many factors – ranging from incorrect information on the application to misunderstandings of policy coverage – can lead to a claim being denied.
Recognising these potential pitfalls is the first step in effectively managing and contesting such decisions.
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Having The Correct Insurance Cover
Most rejected insurance claims and policies we see are underinsured. Ensure your home is not undervalued and, therefore, not underinsured, as this is the most an insurer will pay out regardless of the property’s actual value.
The value of reinstating your property is not what the market value is. Remember that about 30% of the rebuild is in the ground. Add to that legal, professional and local authority fees, and you can see that the sum you have covered in the policy is gradually eroding.
In some cases, an insurer may even return your premium and cancel the policy if you have grossly misrepresented your risk. Remember, it’s your responsibility, not the insurance company, to obtain accurate values for reinstatement.
Lack of Maintenance – Gradual Deterioration
Another reason insurers reject property insurance claims is that if the loss or damage was the result of ‘gradual deterioration’ or a lack of ‘maintenance,’ you will not be covered. Examples of this are a failed damp proof course or some visible rot.
Poor Design or Faulty Workmanship
In this instance, you will not be covered. If you believe the cause to be negligence by a contractor, then you may be wise to seek legal advice regarding a claim against the supplier or installer. Your building insurer will likely reject (repudiate) any claim in this regard.
Materials Value Change
A material change in the risk – insurers must be informed of any ‘material increase’ in the value of the risk they are covering. For instance, with home prices and building costs escalating so quickly, the replacement value of homes has increased. Any alterations to your property will likely increase its value, and there could be a risk of damage during construction. If this happens, seek the advice of an insurance claims management company like Oakleafe Claims.
Excessive Holidays
Beware of taking long holidays. If you leave a property unoccupied for 30 consecutive days or more without advising your insurer, they could have grounds to repudiate a claim. This is especially true for fire claim damage and water damage.
Incorrect Information
Another common reason for denying a home insurance claim is that the policyholder has provided incorrect information. This could come from discrepancies in the details given at the time of application or inaccuracies in the description of a claim incident. Such mismatches can cast doubt on the authenticity of a claim, prompting insurers to reject it.
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Insurance Technicalities
The complexity of insurance policies often contributes to claim denials. Policy clauses, exclusions, and the fine print can make it difficult for policyholders, particularly those who may not be familiar with legal jargon. Understanding the precise terms, conditions, and exclusions of one’s policy is essential to prevent disputes and claim rejections.
What Oakleafe Clients Say:
Jane, a London-based homeowner, had dutifully paid her home insurance premiums for several years. However, when an unexpected fire caused extensive damage to her home, she was shocked to discover her insurer had rejected her claim.
The insurance company argued that Jane had failed to disclose an essential piece of information when taking out her policy — a small, inconspicuous detail about the electrical wiring of her home. According to the insurer, this represented a material non-disclosure, a basis for Repudiation, meaning her claim was rejected.
Jane disputed this decision, arguing that she had been unaware of the significance of the information and that she had answered all the insurer’s questions to the best of her ability when purchasing the policy. Eventually, Jane got in touch with Oakleafe for some claims management help.
We challenged the insurer’s decision and re-presented her claim, resulting in her receiving the settlement she was entitled to.
Jane’s experience underscores the importance of full disclosure when purchasing an insurance policy, but it also serves as a potent reminder of the considerable proportion of claims that insurers deny.
The statistic – 1 in 5 insurance claims are repudiated – should encourage policyholders to arm themselves with as much knowledge as possible about their insurance policies. Understanding the ins and outs of your policy can be a decisive factor in whether a claim is paid or repudiated.
If you receive a denial for your insurance claim, taking strategic steps can significantly impact the resolution of your case.
First, it’s essential to understand why your claim was rejected.
Review the insurance policy’s terms and conditions to ensure the claim is valid based on your coverage. If you believe the claim was wrongly denied, gather all relevant documents, including reports, repair estimates, or any other evidence supporting your claim.
Contact your insurance provider for a detailed explanation of the denial and consider seeking advice from an insurance professional such as Oakleafe Claims.
Understand that you can negotiate with your insurer even after they’ve sent you a rejection of your claim. Their decision does not have to be final. Raise any issues you find that counter their argument.
Your insurer may refuse your home insurance claim due to insufficient or incorrect information. If this is the case, ask them what specific information they require and offer to provide the necessary details. If there has been a genuine mistake, tell them how it was made and explain the misunderstanding. If further information is needed, provide more details and additional evidence to support your claim.
Your insurers’ first response to your claim application need not be the last say on the matter. Do everything you can to correct mistakes, explain misunderstandings, and provide supporting evidence. Your insurer should consider your response; they’ll most likely give you a time frame to respond to their decision.
Take the opportunity to have your say; you could persuade them to reconsider your claim!
If discussions with your insurer fail to produce a satisfactory resolution, it becomes essential to raise a formal complaint. This document should detail your claim, the insurer’s reasons for denial, and your grounds for disputing their decision. Clear, factual, and polite communication is vital to compelling your case.
For those who find the claims process particularly challenging or if direct appeals to the insurer are unsuccessful, external resources such as the Financial Ombudsman Service offer a possible recourse. This independent body can assess your situation impartially and provide a verdict that insurers must follow. In some cases, seeking legal advice may also be an appropriate action.
Denied Home Insurance Claims – While potentially strenuous, dealing with a denied home insurance claim is not impossible. Policyholders can significantly increase the chances of a favourable resolution by understanding the most common reasons for rejection and taking the appropriate steps to contest them.
Common reasons for claim rejections include:
To ensure the best possible outcome from the beginning:
Taking proactive measures to manage your policy and address any issues immediately can help safeguard against future claim denials. If you are uncertain or have specific questions, do not hesitate to seek professional advice. Insurance experts and legal professionals can offer invaluable assistance, guiding you through the complexities of claim management and claim disputes.
Given the present climate, insurers and policyholders need to work towards a transparent and fair insurance claim process to decrease the number of repudiated claims.
Remember, insurance is intended to serve as a safety net, a lifeline in our times of need. Let’s ensure it remains that way. If you have been affected by repudiation, contact us, and one of our highly trained team will contact you to discuss your current situation.
Oakleafe Claims have represented policyholders and managed their insurance claims since before the First World War. We have vast expertise and experience in both domestic and commercial insurance claims with thousands of satisfied policyholders who have received their deserved insurance settlement. With no upfront fees required, our internal data shows that insurance claims managed by professional loss assessors like Oakleafe can expect a settlement up to 40% higher than claims managed by the policyholder.
What Oakleafe Clients Say:
Your rejected insurance claim is likely due to one of a few common reasons.
Insurance claims are generally rejected because you request coverage for items not included in your policy.
Therefore, it’s important to understand your policy and what is and isn’t covered, which includes:
Other common reasons for a rejected insurance claim include:
What Oakleafe Clients Say:
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