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What to Do When Your Homeowners Insurance Claim Is Denied

Ideally, a good homeowners insurance policy should cover the cost of repairing or replacing your home when disaster strikes. But even if you believe that you have enough coverage, your insurance company could still deny the claim you file. If you’re dealing with that issue, there’s something you can do. Here are a few ways to respond when your insurer won’t cooperate.

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1. Find out Why the Claim Was Denied

Any time your insurance company denies a claim, they should send you a written notice that explains why that happened. When you receive this notice, you’ll need to compare it to your policy to find out whether your insurer had the right to reject your claim. If your claim was denied for a vague reason, don’t hesitate to ask for clarification.

In some instances, a claim can be denied because of a clerical error. That’s why it’s a good idea to double-check your paperwork to see if you reported something incorrectly or left out any key information about your home or your mortgage. If you find a mistake, it’s best to get in touch with your insurance company as soon as possible.

2. Consider Disputing the Denial

What to Do When Your Homeowners Insurance Claim Is Denied

If you think your claim was denied unfairly or you believe the damage should be covered under your insurance policy, you can file a complaint. Before you take that step, however, there are a few things you’ll need to do to first.

For one thing, you’ll need to have a legitimate reason for wanting your insurer to reverse their decision. An insurance company may not give your appeal much weight if you don’t have a substantive argument to back it up. Being able to point to specific words in your policy that support your claim, for instance, can put you in a better position to be taken seriously.

Related Article: Can High Deductible Homeowners Insurance Save You More?

You’ll also need to document your home’s damage. It might be a good idea to take pictures and provide a written description of what happened. If the damage was caused by something like a fire or a burst pipe, it’s best to be prepared to provide a copy of your home inspection report or any maintenance records. That way, you can prove that you had nothing to do with the damage that occurred.

Finally, it’s a good idea to keep a record of any conversations you have with your insurance company. If you pay for any repairs out of pocket, you might want to hold on to those receipts (or bank statements).

3. File a Complaint if Necessary

What to Do When Your Homeowners Insurance Claim Is Denied

If your appeal isn’t getting any traction and you feel like the insurance company is brushing you off, you can file a complaint with your state insurance department. That may seem a bit extreme but it might be worth considering depending on the severity of your situation.

Keep in mind that making a formal complaint may not solve your problem. In extreme cases, you may have to think about suing your insurer. If things go that far, however, you’ll have to weigh the pros and cons of taking your insurance company to court.

Related Article: Should You Escrow Property Taxes and Insurance?

The Bottom Line

The best way to avoid having your homeowners insurance claim denied is to know exactly what’s in your policy and what’s not. You might need another policy if you need additional coverage. You may have to pay a little more for your premiums each month. But in the process, you could save yourself time and money.

Photo credit: ©iStock.com/nandyphotos, ©iStock.com/m-imagephotography, ©iStock.com/shironosov

Rebecca Lake Rebecca Lake has been writing about the nuts and bolts of personal finance for nearly a decade. She is an expert in investing, retirement and home buying topics. Her work has been featured on The Huffington Post, Business Insider, CBS News, U.S. News & World Report and Investopedia. As a homeschooling mom of two, she's always looking for ways to make the most of every dollar.
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