Many homeowners often purchase property insurance to assure their home may be protected no matter what happens. Given this reasoning, it's no wonder a majority of these policyholders would feel confused, or even cheated, to find that their worthy claim was denied. In fact, many homeowners often wonder what the point is for dutifully paying for their insurance premiums, when in fact they receive little to no coverage at all. Fortunately, there are a number of options for homeowners who have experienced denied property damage claims.
One of the biggest reasons for denial of a claim on a homeowner’s property damage claim may be that the damage was not covered under their policy. For many, there is a prevailing misconception that homeowner’s insurance covers any damage to the property, as that's almost never the case.
In general, insurance is typically designed to protect a person from a sudden and unexpected loss. This means the damage must have occurred due to a disastrous event, such as a severe storm or fire. If damage happens over a long period of time, such as wear and tear on a roof that slowly leads to leaks, then the damage may not be covered. Such damage must also not be due to the homeowner’s negligence or lack of maintenance. In addition, standard policies may not cover these high-risk damages. For example, a coastal home may not automatically be covered against a hurricane or severe water damage. Flood, hurricane, wildfire and earthquake damage are some of the most frequently not covered and are almost always location specific.
When deciding whether your claim was rightfully denied or not, it would be worth reviewing your policy to determine what is covered in comparison to what isn’t. Don’t wait until something happens and just hope you are covered. Policies can be long, confusing and the wording may leave you wondering exactly what is covered. An attorney and insurer can help sort through your policy and may be able to advise you on the best way to pursue your property damage claim. Remember, these insurance companies aren’t always on your side, either. These insuring companies generate their revenue based on their policies and can pay as little as possible for the claims. Since the insurance companies generally look out for their own benefit, many of these insurers may be unwilling to fairly compensate for damage that’s rightfully owed, this is known as “insurance bad faith.”
In some cases your claim may not be denied, but you actually are compensated for a lot less than what you were initially expecting. In some cases, the payout on a claim isn’t enough to cover the actual replacement of the items lost. This can be just as surprising and frustrating as a full denial. Again, it pays to have a thorough understanding of the specific wording in your policy. There are two basic types of coverage for losses. If your policy states that you get “Actual Cash Value,” then your compensation is dependent on the value of the assets at the time they were lost. This means they are subject to depreciation. For example, consider you lost a desktop computer in a fire that cost $800 when you purchased it. Since you purchased it several years ago, it has depreciated since then and you may only get $500 for it on the claim. “Replacement Cost” is typically the better route as you may be entitled to whatever it may cost to replace the lost item, regardless of its value at the time of loss, or what you paid for it to begin with.
Unfortunately, filing a claim isn’t as simple as calling your property’s insurance provider and requesting compensation. Most claims have a significant amount of paperwork behind them and it’s unlikely these insurers will just take your word about the damages you suffered and fairly compensate you for such reasoning. Additionally, there are two levels of documentation that are important to ensure your claim isn’t denied. The first is to document the assets you have before something happens to them. This is your proof that you actually did suffer a loss and aren’t just inventing non-existent assets in order to increase your claim’s value. Pictures are the best evidence, although a specific list of items and where they are located may work. The second level of documentation is the actual damages suffered. This means taking pictures of the accident scene and any damaged assets included in the claim. Having witnesses or third-party corroboration of the accident or losses may also help support your claim, as well.
Most insurance policies have a clause that essentially states the homeowner is expected to minimize the amount of their loss in case of an accident. For example, if your home caught on fire, there is an expectation that you returned once it was safe and attempted to salvage anything you could. If you don’t make an attempt to do this and just try to file a claim for everything in your house, the insurance company may accuse you of violating this clause.
Unfortunately, it’s common for insurance companies to deny rightful claims or pay as little as possible, all while still fulfilling their contractual duty to you as a policy holder. Insurance companies generate most of their revenue by not compensating claims. This automatically puts you at odds with the company's interests when you file.
Most homeowners are unaware that if an insurance company denies their claim, they may be able to take legal action in a further attempt to obtain their rightfully earned compensation. Filing the claim alone may be confusing and provide room for error, especially if the individual has no legal knowledge or experience working with property damage laws. Furthermore, by retaining the legal support of a trusted property damage attorney, these individuals may be able to have their home repaired, as well as potentially receiving compensation for any losses that were incurred. For any questions, comments, or concerns you may have regarding your property damage matter, contact our firm immediately – we’re here to help.
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— Jack Ter-Saakyan, Esq.
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