10 Reasons Homeowners Insurance Claims Are Denied (And What To Do)

As a property owner, what could be worse than a disaster that strikes your property, such as a fire, theft, a major plumbing leak, or a windstorm?

It’s even harder to imagine a worse feeling than being told that your homeowners insurance claim was denied after such a disaster. When you learn that your personal property insurance claim has been denied, you may question what went wrong and whether you should seek the help of an insurance claims lawyer..

Why Would A Property Insurance Claim Be Rejected?

There are many reasons your insurance claim may be rejected. There are many reasons why. For example:

  • Timeliness of Filing – If you don’t file your claim on time, it maybe rejected
  • Exclusion Condition – The property damage may fall in your exclusion condition.
  • Missing Payments – Your insurance premiums are overdue and haven’t been paid
  • Documentation – Missing documentation to satisfy the policy may lead to a claim being rejected.
  • Fraud – An insurance adjuster may find your claim to be false or misleading.
  • Precautions – You may have not taken the appropriate precautions to minimize the loss.

While claim experts’ assistance may be required, claims rejection can sometimes be due to simple reasons with manageable solutions.

Let’s take a closer look, shall we?

Reasons Homeowner Claims Are Rejected (And How To Avoid Them)

Have a look at some of the most prevalent reasons for personal property insurance claim denials and some suggestions for preventing them in the future.

1. There are Paperwork Errors or Mix-Ups

You accidentally mixed up some paperwork or made an error on your claim. Insurance firms have to take all necessary precautions to avoid fraud. If there was a mix-up or an error, your claim could be questioned for fraud — even if it’s just a mere typo. Don’t try to recover parts of your property that are unrelated to the current loss or claim damages paid for in a previous claim, which you didn’t have repaired or replaced.

What to do:

To prevent paperwork mix-ups or any errors, double-check your paperwork and proofread for any mistakes you may have made.

2. You Misrepresented the Damage

You might want to get your property damage repaired as soon as possible, but claiming things you aren’t entitled to might result in your insurance company rejecting the entire claim, not just those portions you shouldn’t have claimed.Whenever a claim is filed, it is always best to be as specific and exact as possible. The insurance industry frowns upon the practice of lying about how the damage occurred to your property. You may not only have your claim dismissed, but you could also be held responsible, which could result in penalties — or even jail time.

What to do:Insurance providers are constantly on the lookout for fraudulent activity. To avoid going under investigation, you should:

  • Cooperate
  • Disclose all pertinent information
  • Provide proof such as witnesses and photos

If you are under investigation for fraud:

  • Seek legal assistance right away.
  • When the investigator records your interview, request a digital copy of the interview or transcript.
  • In case English is not your first language, ask for an interpreter.
  • Do not sign anything you are uncertain about before and after the interview.

3. Misrepresentation of the Property

property insurance claim

You may be familiar with a standard homeowner’s insurance policy that protects your house or property.

What if you’re planning to transform your home into a rental property or rent out part of the rooms?

Or, for that matter, investing in a brand-new rental property? A homeowner’s insurance policy will not suffice in either instance, and you will need to convert to a landlord insurance coverage.Occupancy misrepresentation is considered fraud as well. Both a landlord’s insurance policy and a homeowner’s insurance policy safeguard your property from damage.

However, they cover you in entirely different ways. When you own a rental property, landlord insurance protects your investment far more than when you rely on homeowner’s insurance.

What to do:Some people don’t declare to their insurance provider when they decide to switch back to the owner-occupied property, so they can still get the advantages of landlord insurance. Again, it’s preferable to be truthful than to force yourself to give proofs for claims that you don’t have in the first place.

4. You Have Insufficient Documentation

Your claim may be rejected if you do not submit the required information. Inadequate property damage evidence and a thorough inventory of items on or in your property before the loss might undermine your case.

To help support your claim, take pictures of the damage to your property as soon as possible.

What to do:To settle your claim, insurance adjusters will require as much information as possible about the damage — this is where all of those pictures will come in handy.

The insurance company may send an adjuster to examine the damage. Still, you should furnish the necessary things requested by your insurance company — such as a detailed written statement of the damage to go with the photos.

5. You Are at Fault for the Incident

Most insurance plans have a “duty of care” or “reasonable care” clause that requires you to take reasonable precautions to avoid claims. In theory, this is fair, but it can lead to your insurance provider rejecting claims for dubious reasons in practice.Your claim may be denied if a disaster did not cause damage to your property.

What to do:

It is your responsibility to demonstrate that the furniture, fixtures, or premises covered by your insurance were damaged at the time of the event. If an expert says that your property was already damaged or in poor condition, you will need to produce counter-proof.

6. The Service Is Not Covered Under Your Plan

property insurance claim

Your property insurance, as excellent and protective as it is, does not cover all types of losses.

Standard covered risks include fire, lightning, and wind damage.

However, many other add-ons, such as mold and water backup damage, are not covered unless you pay an extra premium to add them to your insurance.

What to do:Other forms of damage are frequently excluded from regular property coverage unless you opt to add them on, such as the following:

The above disasters necessitate different coverage insurance. If one strikes your property and you don’t have the necessary insurance, you’ll be out of luck.

7. You Did Not Follow Plan Rules

The insurance company must pay insurance claims.

Nonetheless, suppose they are dissatisfied with your conduct or believe you have been irresponsible and not following plan rules.

In that case, they may examine your insurability with them after the event and terminate your policy.

What to do:When your insurance company pays a claim, it doesn’t imply you’re out of the woods. Insurance providers are in the business of reducing risk.

Hence they attempt to choose and retain clients who will help them do so.

An insurance underwriter may decide to terminate a policy if the person is plainly irresponsible, not following rules stated in their policies, or has a history of claims that might have been avoided.

8. You Missed the Deadline to File a Claim

Time-sensitive restrictions for making a claim and demonstrating damage are common in property damage claim policies.

Begin the claims procedure as soon as possible by notifying your insurance company of the damage or loss right away.

What to do:You may miss the window of opportunity to make an insurance claim if you aren’t prompt enough.

If you wait too long to make a claim, your odds of receiving a satisfactory payout decrease.

It’s wise to verify with your insurance company because deadlines might range from 180 days to a year.

9. You Are Behind on Your Payments

It’s crucial to stay on top of your premium payments. An insurance provider will expect you to pay your premium on time, and if you don’t, you risk having your policy lapse due to non-payment.If you miss a payment or are late on a payment, your insurance coverage may terminate.

Your insurance provider may be able to refuse your claim if this occurs and may hurt your property as a result.

What to do:

It is possible that a payment was not adequately reported or that someone’s records were incorrect. With this, you may be given a grace period to make up for missing payment.

10. The Damage Is Less Than the Deductible

property insurance claim

Every policy comes with a deductible that you must pay before your coverage kicks in.

If the cost of the damage is less than your deductible, you’ll have to pay for it yourself.

What to do:The damage isn’t expensive enough is perhaps the most common cause for claims being denied.

For example, if your property insurance policy has a $1,000 deductible and a burst water pipe costs $700 to fix, your insurance provider will be unable to pay anything on the claim.

You must first pay the deductible before the insurance company would cover the damage.

Don’t Forget the Exclusion Clause!

Conditions and exclusion clauses are standard in insurance contracts. For example, you must maintain your property to keep it in excellent working order. All windows and external doors must have keyed locks and deadlocks.

You’ll need to go over your policy carefully to see what conditions apply.If you fail to comply with a condition, your insurance provider may deny your claim. On the other hand, an insurance company cannot refuse to pay a claim because of any act or omission.

They can, however, limit the amount they will pay you to the extent that your actions or inactions have harmed their interests.Let’s say you didn’t install keyed locks on all of your windows, and a burglar breaks in by shattering a window or smashing down the front door. In such an instance, you might be able to argue that your failure to install or maintain window locks did not prejudice your insurance provider because it had no bearing on the loss or damage caused by the break-in. A scenario or occurrence not covered by the insurance is an exclusion standard in insurance plans. Flood damage, fair wear and tear, damage resulting from defective construction/design, subsidence, erosion, and seepage are some examples of occurrences that may be excluded.

What to do:To rely on an exclusion clause, the insurance must show that it applies to the balance of probability.

In some circumstances, your provider may be required to explain the exclusion to you adequately.

However, this does not have to be done in person. It’s typically enough to provide this information on the document you receive when you sign up for the insurance.Some of the most common exclusions are:

Exclusion #1: Damage From Normal Wear and Tear

“Wear and tear” and damage caused by a failure to maintain the property are frequently excluded from insurance policies.

A storm, for example, might cause your roof tiles to fall off. If your property is ancient and some parts need replacing because of its age, the insurance may refuse to pay the claim.

Insurance plans are not a replacement for poor property maintenance.If your insurance denies a claim due to wear and tear, you should try to get the following:

  • Proof that a storm or other insured event caused the damage.
  • Proof of regular maintenance work and inspections.
  • Evidence of the property’s overall condition of repair.

Exclusion #2: Flood

If your insurance company tells you that your property damage was due to a flood and that your insurance doesn’t cover flood, you should still file a claim.


Because this is due to the possibility that your insurance is incorrect.If your insurance company denies your claim because floodwaters caused the damage, you should seek legal advice because:

  1. 1If a significant number of individuals are affected, the insurance company may agree to settle the claim nonetheless.
  2. 2Your claim may still be settled if the damage was caused by both rainwater and flood. Even if a flood enters your property, if rainwater infiltrates your property first, and damages are produced by rainwater coming through a hole in the roof, you may still be able to get your claim settled.

Frequently Asked Questions (FAQ)

Does a denied home insurance claim count against you?

The short answer is yes, it does. When a claim is denied, it says the insurance company that you are at risk.

How do I fight a denied home insurance claim?

The first step is to contact your claims adjuster. You’ll need to know the exact reason why your claim was rejected. Once you find out, you should send a formal letter to document your appeal and start gathering evidence.

What does a denied home insurance claim mean?

A denied home insurance claim means that your claim doesn’t match your policy. If you think otherwise, you have the opportunity to dispute it.

Do insurance companies deny fire claims?

Insurance companies can deny fire claims if there is an exclusion. Policyholders who have filed for these losses may not be covered. It’s best to check your policy inclusions and exclusions.

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