Omar Ochoa Law Firm

What to Do If Your Homeowners Insurance Claim Is Denied

Updated:

September 4, 2023

by

Omar Ochoa

June 30, 2023

April 16, 2024

Has an insurance company denied your claim? Homeowners carry homeowners’ insurance and pay insurance premiums with the expectation it will be there for them when they need it. The reasons claims are denied sometimes make sense, and sometimes don’t at all. If you have had a home insurance claim denied in Texas, you have the right to appeal. The Texas insurance claim attorneys at Omar Ochoa Law Firm can help you understand your options and the best course of action.

Common Reasons for Homeowners Insurance Claim Denials

insurance claim denied

If your insurance claim is denied, you (the policyholder) will receive a formal letter explaining why. Below are some of the common reasons that an insurance company may deny a claim.

Reason #1 The Specific Event that Occurred Is Not Covered

There are a few different types of homeowners insurance policies, with varying coverage. Not every type of damage is covered by every policy. Your insurance carrier may spell out specific events that are not covered event. Events that may not be covered may include things like floods, earthquakes, or acts of war.

A policy may also exclude liability for injuries on attractive nuisances like a swimming pool diving board, trampoline, or tree house. You may be able to purchase separate insurance coverage for certain perils. For other items, a rider may be available at an additional premium, but not all insurance companies offer them.

Reason #2 You Didn't File the Claim Soon Enough

Insurance claims are always time-sensitive, and part of the terms of your insurance policy includes notifying your insurance carrier and filing your claim within a prescribed filing window. You may have to notify your insurance carrier in as little as 24 to 72 hours. You will have more time to file - filing deadlines are often six months (180 days) to one year, from the date your insurance occurred. Even if the damage to your home is covered by our policy, if you do not file your claim within the window, you may receive a home insurance claim denial.

Reason #3 You Didn't Make Temporary Repairs After the Damage

what to do if insurance denies claim

Your insurance company will expect you to complete temporary repairs to prevent further damage; failure to do so could be grounds for a claim denial. For example, if there is a water leak, you will be expected to stop the source of water. If there is a damaged door or window, you would be expected to board it up to keep the property secure. Always keep receipts and take photographs of temporary repairs - in case you need to prove you made them.

Reason #4 Your Insurance Claim Is Incomplete

It is not likely that you will have a denied claim if your property claim is just missing a few pieces of information (your insurer will simply ask for it). However, if you do not respond to communications or requests from the insurance office handling your claim, the claims adjuster or claims manager may eventually deny your claim.

Reason #5 You Let Your Insurance Lapse

home insurance claim denied

If you do not pay your insurance policy premiums, your policy may lapse. Your insurance company is required to notify you before ending your coverage, so if they did not notify you before canceling your coverage, you may have grounds to dispute a claim denial. A knowledgeable insurance claims attorney can help you determine your rights to appeal in this situation.

Reason #6 The Damage Is Considered Normal Wear and Tear

Your homeowners' insurance policy likely contains verbiage that your home must be well-maintained and kept in good condition. In effect, this makes you responsible for performing regular maintenance on your home, and excludes your insurance company from responsibility for “normal wear and tear.” Deterioration from gradual aging of your property over time is considered a natural process, and is not technically “damage”. Examples of normal wear and tear could be loose caulking around a bathtub, or peeling wallpaper in a bathroom, after some years.

If your home is older, your insurance company may request an exterior inspection to look for normal wear and tear on your siding, foundation, roof, chimney, and other structures. Even if an inspection has not been done, property insurance claims may be denied if the damage is suspected to be expected or normal deterioration.

Reason #7 The Damage or Property Loss Was Caused by Your Own Negligence

homeowners insurance claim denied

If your negligence - or failure to use reasonable care -  caused damage, the insurance company may deny your claim. However, accidents and mistakes happen, and insurance policies typically cover things like accidental floods and accidental fires.

Reason #8 The Insurance Provider Suspects Fraud

The insurance company may deny your claim if they suspect you misrepresented information on your claim. You can strengthen your claim by being completely truthful and providing evidence to back up your claim (photos, videos, witnesses, etc.).

Steps to Take When an Insurance Company Denies Your Claim

1. Read Your Policy and Denial Letter Carefully

reasons an insurance claim can be denied

If you received a formal letter from your insurance company stating that your claim was denied or that your claim may be denied, read it carefully. You may be asked to provide documentation or additional information for review and to respond within a certain time. Before you respond, review your policy language carefully.

2. Gather Evidence and Build Your Case

Gather sufficient evidence and documentation to support your claim, and dispute the reason for the denial. This could include hiring your adjuster or getting a second opinion of a public insurance adjuster, to estimate needed repairs. Although these come at an additional cost, they may be worth it if you need to file an appeal of a denial, or do not receive a settlement offer.

3. Appeal the Claim Denial

Depending on the nature of the denial, you may choose to get the professional opinion of an attorney before appealing. Appealing a claim can be tricky because insurance companies are unlikely to overturn a denial without compelling evidence. It can be hard to make a different argument for a denied claim, if you already presented a specific narrative of events, and do not have new evidence.

4. File Complaint with Your State Insurance Department

If your insurance company refuses to honor our claim, the next step is to file a complaint with your state insurance department. The state’s department of insurance (state agency) will review your complaint, and your claim, to make sure it is being handled properly, following the terms of your policy.

5. Consider Mediation

does a denied home insurance claim count against you

Mediation may be an option to resolve, depending on what is being disputed. If the mediation is not binding, this can be a frustrating exercise with no ultimate resolution, if the insurance company decides to simply reject the outcome.

6. Consult a Property Damage Attorney

Filing a lawsuit may be necessary if you have done everything you can to obtain compensation for your claim, and your insurance company will not budge. Speak to a lawyer about the strengths of your claim, and your legal rights and options.

Denied Homeowners Insurance Claim: Contact Omar Ochoa Law Firm to Get Help Today

As a responsible homeowner, you carry Fhomeowner’s insurance to protect your investment. Insurance policies are unique contracts - and may be confusing. Do not let the insurer deny you the benefits you are entitled to. If your insurance company is refusing to settle your property damage claim and pay you what you deserve or is creating undue delays, contact Omar Ochoa Law Firm today to see how an experienced homeowners insurance claim attorney can help you.

Omar Ochoa

Omar Ochoa has been nationally recognized as one of the best young trial lawyers in the country. He's represented clients in federal and state courts and arbitrations throughout the United States and internationally. He is highly experienced in a wide range of complex litigation and has handled a variety of cases. He has recovered hundreds of millions of dollars for clients of all types — from individuals to mid-sized business owners to multi-national companies.

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    FAQs

    Does a denied home insurance claim count against me?

    Possibly, but not necessarily. Your denied claim will be reported, but it does not necessarily mean you will be unable to obtain future insurance Insurance claims go to a special consumer reporting agency - and your claim information will be disclosed in a Comprehensive Loss Underwriting Exchange (C.L.U.E.) report. Information reported will include your name, the details about the claim including the property address, and the claim status.  When you apply for a new policy with another company, your claims (including denied claims) and payouts will be available and may be a factor in their underwriting decisions, and premium costs.  

    If you’d like to know what is on your CLUE report, you can request one free report every 12 months.

    What is an adjuster?

    An adjuster is a professional who assesses and evaluates property damage and calculates and recommends how much a policyholder should be paid for a claim. A claim denial may be based on something the adjuster determined, either by erroneous calculation or missing evidence. You may be able to have your appraiser, or an independent appraiser, assess your claim.

    What is an appraisal? 

    Appraisals are a form of alternative dispute resolution in a property damage claim. Appraisals are generally not helpful for outright claim denials but may be beneficial in situations where there is a dispute about the cost of repairs. You and your insurance company may each have your indent appraisal to assess the damage and needed repairs. From there, a neutral third party, a CPIU (Certified Property Insurance Umpire) may help determine a final award.

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