Property damage tends to have significant financial repercussions. Therefore, to protect their interests, property owners purchase insurance. It provides liability coverage or property protection, or both. Since you invest in property insurance, the last thing that you would want to be worried about is claim rejection when the situation arises.
Today, we shall discuss the circumstances under which the insurance company can reject a property insurance claim. Hopefully, by the time you are done reading this highly informative article, you will know the catches you need to be careful about.
Know Your Policy
Before discussing the reasons that lead to claim rejection, it is vital to understand that no two property insurance policies are the same. So what applies to your neighbor may not necessarily apply to you and vice-versa. Hence, do not go by other’s experiences. Instead, right off the bat, understand the terms and conditions of the policy you have purchased. You have every right to question the insurance agent until the complete picture is clear. In case you don’t wish to go that way, you can hire a public adjuster to help you with the same. If necessary, make notes of your own.
Circumstances In Which Property Insurance Claim Is Rejected
The common reasons that lead to rejection of property insurance claims are:
1. The Loss Is Not Covered In Policy – Property insurance policies are tailored as per need. Say you buy property damage insurance and no liability coverage to go with it; in that case, any liability claim arising will not be honored by the insurance company. Let us take another example. If you forgo purchasing flood insurance cover or damage from an earthquake, such a claim will be denied by the insurer. Similarly, there are some exclusions in every policy. If the damage to your property is because of any of the so-called exclusion, it will not be accepted. Hence, as we mentioned above, you should know the terms and conditions of your insurance policy like the back of your hand. Only those losses are honored that are covered in the insurance policy. Anything outside will be outright denied.
2. Unfulfilled Policy Conditions – Some necessary conditions need to be fulfilled by the insured. Failing to abide with them will lead to claim rejection. Examples of such conditions are security locks on all doors leading outside, the necessity of one or more fire extinguishers depending on the size of the property, etc. These conditions are mentioned in the policy document.
3. Delay In Filing Claim – In case of loss or damage to property, there is a set timeframe within which the insurance company needs to be informed and the claim forms filled and submitted correctly. If you fail to meet this timeline, the claim will be denied. But rest assured, the timelines are realistic and can be met with relative ease. This information is available in your policy document. If you cannot find it, your insurance company is just a phone call away.
4. Missed Premium(s) – If you fail to pay one or more premiums against your policy, the insurance company is under no legal liability to honor your claim. Since you broke the terms of the contract by skipping the problem, the damage is now your sole responsibility.
5. Withholding Pertinent Information – Claims arising due to property owners or tenant’s negligence are not covered. These are also the cases where the insured tries to withhold pertinent information that could lead to the truth. So any claim where important facts or information are conveniently withheld by the insured will get rejected.
6. Damage Is Not Documented Correctly – When filing a claim, the property owner has to prove loss. Hence, it is important to document it in detail. You need to provide even small details like date and approximate time of loss, attach pictures and videos of the damage, mention the assets condition prior to the damage, etc. Only with full documentation of a covered loss can you have the guarantee that the insurance company will fulfill its side of the deal.
7. Preventive Steps Not Taken To Contain Further Damage – Once the primary damage has occurred, it is the property owner or tenant’s responsibility to ensure that they take the necessary steps to prevent its further spread. Some of us do it diligently and make copious notes and pics of the efforts, and many of us leave it to chance. The insurance company is under no obligation to cover the secondary loss if you have failed to follow the preventive measures.
8. The Insurer Suspects Fraud – The insurance company conducts its own investigation of the loss. If it suspects fraud and finds any evidence of the same, your claim will be denied. Since they thoroughly investigate every high dollar value claim, it is best advised that you don’t use any underhand tactics. Many times it has been seen that people try to pass off intentional damage to property as accidental. From there, they build a false case to prove loss. These fraudulent methods are not looked upon favorably by the insurer.
Property insurance does not cover the intentional loss. It only covers those instances that are accidental in nature. Then too, the insured must adhere to all the policy conditions, including setting up preventive measures and paying premiums on time. Other than that, know beforehand the types of loss that are covered by your insurance policy. If and when the loss does occur, be prompt in informing the insurance company of the same and try to fulfill all their formalities correctly and well in time.
Filing a claim is a tedious task, one that can frustrate the living daylights out of you, especially with all the running about it involves. Thankfully, you can now hire a reputed public adjuster like Continental Public Adjusters to make your claim settlement process a breeze. We also guarantee that you get the maximum possible settlement amount. To book an appointment, reach out to us at (800) 989-4769.