Understanding Property Insurance
Property insurance is a type of home insurance which provides financial protection to property owners or renters against any damage or loss to their property owing to natural calamities, fire, theft, or malicious activities. When your property gets damaged due to any of these perils, repairing or renovating your property can lead to substantial financial loss. Having property insurance ensures you are financially safeguarded from covered perils.
Why does a property insurance claim get denied?
Some common reasons why your insurance claim gets denied include –
- Policy lapse: If your policy has lapsed due to non-payment of premium, the insurer is not liable to pay for the damage.
- Not in coverage: If the damage is caused by a peril which is not covered by your policy, your claim will be denied. For instance, if your property gets damaged due to floods, and your homeowners’ insurance does not include flood damage, the claim will be rejected.
- Delay in filing the claim: Insurers have a time limit within which you have to file a claim. If you fail to notify the insurer within this specified timeframe, there are chances of your claim getting denied.
- Exclusions: A property insurance policy comes with some exclusions. If the damage is due to negligence, normal wear and tear, war, terrorist activities, or intentional damage by the owner, the insurer will not cover the loss.
- Lack of sufficient documentation: If you fail to provide documents or evidence supporting your claim, such as photos or videos of the damage, your claim can be denied.
- Misrepresentation of facts: If the insurer finds out you have misrepresented the facts, whether accidentally or intentionally, it will be considered fraud, leading to claim rejection as well as cancellation of the policy.
- Modifications: If you made significant changes to the property, which the insurer is unaware of, your claim will get denied.
What should you do when your claim gets denied?
If your insurance claim is denied, here are the steps you can take –
- Understand the reason for denial: The first step is understanding why your insurer denied the claim. The insurer must give a detailed explanation for the denial which could be policy lapse, insufficient documentation, or if the claim is not in the scope of coverage.
- Review your policy: Once you get the explanation letter from your insurer, check the details of your policy to see if the reasons for rejection align with your coverage.
- Contact the insurance company: Reach out to the insurer via email or toll-free number if you disagree with the claim denial reasons or the reasons are not clear. It’s always better to send the complaint letter by email.
- Keep all documents: Keep all relevant documents to strengthen your case, such as the policy, claim denial letter, receipts of repair costs, photos, and all written communication with the insurer, like emails, texts, etc.
- File an appeal: If you think the claim was rejected without any justifiable reason, file an appeal with the insurance company. There is usually a timeline for filing the appeal, so check your policy document or ask your insurer and file it as soon as possible.
- Hire an external adjuster: An independent or public adjuster will represent you, not the insurance company. If you think the insurance company’s adjuster was incorrect, an independent adjuster can help strengthen your case and navigate the claims process.
- Hire a lawyer: If you are not allowed to hire a public adjuster, you can consult a lawyer to fight your case. You may also file a lawsuit for additional damages if the insurer doesn’t make a proper investigation or is unreasonably denying your claims.
Conclusion:
Property insurance provides financial protection to property owners against any loss/damage to property due to natural calamities, theft, or accidental damage. However, not all claims get approved, as there are numerous reasons why your claim can get denied. If you disagree with the reasons for denial provided by your insurer, you can follow the steps as mentioned above. Before buying property insurance, it is essential to understand the inclusions and exclusions of the policy to avoid issues during claim settlement.