How Do You Fight a Homeowner’s Insurance Denial?

Mar 15, 2022

How Do You Fight a Homeowner’s Insurance Denial?

When a homeowner purchases insurance, they expect that it will compensate them for damages to their home and property in the unfortunate event that a disaster occurs. Sadly, insurance companies are businesses. Their model is to take money from the insured and pay as little as possible if an event occurs. In fact, most will use any reason to deny a claim. When claims are approved, homeowners are often disappointed to find that the settlement is far less than expected. When a homeowner’s insurance claim has been denied or approved for a less than reasonable amount, there are steps they can take to pursue a more satisfactory result.

Start By Looking at the Policy

When an insurance company denies a homeowner’s claim, the first thing they should do is carefully review their policy. It is essential to know that the policy covers the claim and determine how much the coverage limits allow to be paid out for such claims.

It is important to note that a standard homeowner’s policy doesn’t cover every scenario. For instance, most policies don’t offer coverage for earthquakes and floods. Anyone who lives in an area prone to experience these natural events should purchase insurance specifically for such disasters.

After a careful review, it should be clear whether the policy covers the claim or not. If it should be covered, there are several actions the homeowner can take; otherwise, they will likely be responsible for replacement or repairs on their own.

Speak With Your Agent

Once an individual has taken a careful look at their policy, they can also contact their insurance agent and ask for clarification. The agent should be able to explain the reason for the denial or lowball settlement amount. If they cannot provide a reasonable answer, it is wise to ask for a manager.

Keep in mind that some agents will attempt to use confusing language to confound their clients and get them to give up on pursuing their claim. It is perfectly acceptable to keep asking questions until they provide a clear explanation.

If the insurance company’s representative cannot adequately explain their decision, the homeowner can ask them to send a different adjuster to the house to provide a second opinion. It is essential for the company to make their reasoning clear to the homeowner, so they can decide how they will proceed.

Homeowners Can Appeal the Insurance Company’s Decision

If a homeowner is unhappy with the insurance company’s decision, they can submit an appeal. This is often done by filling out a standard form, although most companies require it to be submitted within a certain timeframe. The homeowner will need certain information to file their appeal, such as:

  • Steps taken to prevent damage
  • Date of the incident and damage incurred
  • Witness statements
  • Proof that preventive measures were taken

Once the form is submitted, the company should perform a review of the denied claim. The homeowner should stay in contact with their agent as this process progresses to stay on top of the case.

It May Be Necessary to Reach Out to the State

If a homeowner has filed an appeal with their insurance company but hasn’t made any headway, they may need to reach out to their state’s department of insurance. This government agency typically provides free resources, information to help individuals understand homeowner’s insurance in their state and advice. In some cases, the agency may even investigate a claim for a homeowner to help them get results or offer mediation between the insurer and the homeowner.

The insurance department is headed by a public official called an insurance commissioner, whose job includes investigating claims made by homeowners and the legality of decisions made by insurance companies.

Having an Attorney Is Always Wise

Whenever there is an issue with an insurance claim, especially for a high sum, there is no better advice than that of a skilled insurance attorney. Some homeowners choose to call an attorney as soon as their claim is denied, while others opt to try working things out with their agent first. Either way, the important factor to remember is to hire a lawyer before any binding settlement offer is reached. An experienced attorney can review the details of the case and advise their client on whether they have a solid case.

What If the Settlement Offer Is Too Low?

If a claim is approved but the offer from the insurance company is lower than the homeowner expects, the homeowners do have options. They can get an independent appraisal, either privately or through a public insurance adjuster. The homeowner should review the section of their policy that covers appraisals, as they will likely need to submit a written request, and select an appraiser approved by the insurance company.

Homeowners should be aware, however, that they are typically responsible for paying for the appraisal and may need to split the cost of any mediation with the insurance company. In some cases, service fees for public adjusters can be as much as 20% of the value of the settlement, so the homeowner should check into this before proceeding.

Consider Filing an Official Complaint

When an insurance company has mishandled a homeowner’s claim, they may need to reach out to the state insurance department and file a complaint. Every state has its own requirements, but ultimately the insurance commissioner is tasked with ensuring that insurers play by the rules. Therefore, it is worth researching the requirements and filing a complaint when a homeowner feels they were treated unfairly.

Don’t Trust Your Insurance Case to Just Anyone

When a homeowner decides to dispute an insurance claim offer or denial, they will want to have a legal professional who understands the details of insurance coverage and insurer decisions on their side. Contact our office if you believe your case was mishandled and you received a lowball settlement offer or a denied claim. The knowledgeable team at Winthrop Law Group P.C. Attorneys at Law may be able to help you get the answers you need and the compensation you deserve. Visit our website today to see how we can help you.