I Can’t Believe My Homeowners Insurance Claim Was Denied!

As a homeowner, the idea of facing one of your possessions being damaged or even destroyed can be frightening. But if you have homeowners insurance, you’re covered, right? Not always! If your claim has been denied by your insurance company, it can leave you at risk and without a valid reason why. Read on to learn more about this frustrating process and what you can do about it.

Know the Difference between Actual Cash Value and Replacement Cost

It is a smart idea to know the difference between actual cash value and replacement cost so that you can avoid getting your homeowners insurance claim denied in the future. If an insurance company offers you replacement cost, they will provide the amount of money needed to purchase or build something new or comparable to what was lost. Actual cash value, on the other hand, only covers what it would have taken to repair or replace property with something comparable – not new. It’s easy for homeowners insurance companies to deny claims if they think that a homeowner submitted a fraudulent claim and should have known about the cheaper alternative. The best way to protect yourself from having a homeowner’s insurance claim denied is by making sure you are as informed as possible before filing one. Some homeowners don’t realize the importance of reading their policies and go ahead with submitting a homeowner’s insurance claim without understanding what they are agreeing to when they sign them. Reading through your policy is vital because there may be certain exclusions that do not cover certain types of items, such as jewelry.

Read your Policy Coverage’s before a Disaster Strikes

Homeowners insurance can be a lifesaver, but what happens if your homeowners insurance claim is denied? Before disaster strikes, it’s important to read your policy and understand the different coverage levels. These include: Liability for others on your property, Loss of use, Personal property protection in some states. Be sure to read up on these policies and their limits. Once you understand them all, it’ll be much easier to make a decision when filing a homeowner’s insurance claim after disaster strikes. It also helps to know that each state has its own specific set of rules for how homeowner’s insurance should work. You may have only have liability coverage in one state, while another may require personal property coverage as well. States like Louisiana don’t offer any type of Personal Property Protection, so you’re covered from damage caused by events such as fire or storm surges but not theft or vandalism. If you live in Ohio, on the other hand, you’re covered from damage caused by anything – from thieves to storm surges – which is more helpful than other states where things are more limited. Find out about the specifics for your area before disaster strikes so that when an unfortunate event does happen and an emergency arises, you’re prepared with knowledge about what to do next.

Never Lie on an Insurance Application

When you are filling out an insurance application, there are two things you should never lie about. The first is in regards to anything that would reflect on your lifestyle. If you have a habit of living above your means or not being cautious with money, chances are that this will show up when you fill out the application and potentially deny your insurance claim. Next, be careful about what kind of information you share on an application related to other property owners. If they were at fault for the incident and they were required to disclose this information and they did not do so, then you may not be covered because of the faulty representation loophole. The same can go for liens, lawsuits and more- these may all serve as reasons why an insurance company could turn down your claim.

While these clauses might seem unfair, it’s important to read over any forms before you sign them because once it’s too late, all that matters is the word of the contract.

Make Sure You Document Everything

If your insurance company denies your claim, it may be because they feel you missed the statute of limitations. Essentially, the state sets a timeframe where homeowners have to submit their complaints with their insurance company and resolve any issues that arise. This timeframe varies from state to state and some are as low as one year.

Unfortunately, this means that if you submitted your complaint after the statute of limitations expired, then you will most likely not be eligible for compensation for damages incurred on your property. Keep in mind that each individual case is different, so always review your policy’s fine print before giving up hope.

Familiarize Yourself with Your State’s Statute of Limitations

It can be difficult to figure out where this information is, but you should be able to find it in your homeowner’s policy or by contacting your insurance agent. They will tell you how long you have from the time that damage occurred before it is too late for the insurance company to accept liability. This time frame usually ranges from two years up to five years and this may vary on different policies. If these deadlines are not met, many cases will no longer be valid, which could mean a denied homeowner’s insurance claim. For example, if someone notices water damage three months after a storm hit their home, they would only have one year from the time of the storm before their case becomes invalidated. The good news is that there are often other ways to solve this problem such as finding an attorney who specializes in home-related issues who may be able to help them out.