What To Do If Your Insurance Claim Is Denied

what to do if your property insurance claim is denied

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Every day, people face the brutal reality of a property insurance claim denial – sometimes for good cause, sometimes by mistake, and many times for reasons no one understands. There are measures you may take to dispute this denial, whether you simply need to produce more paperwork or take serious legal action. Regardless, you have every right to challenge your insurance company’s rejection of coverage if you experienced an insured property loss and were met with a refused claim. In this post, our Fort Myers property insurance claims attorney at McIntyre & Bermudez, PLLC will explain why your property insurance claim might be denied and what to do if it is. 

In What Circumstance Would a Property Insurance Claim Be Rejected?

After a disastrous event that leaves you with significant property damage, such as seasonal Florida hurricane damage, fire damage, lightning strike, flood damage, or other Florida storm damage, the last thing you want to do is worry about finances. You likely want to get your life back on track and your home and other assets back in order as quickly as possible. You may think that filing an insurance claim is the easiest and most efficient way to do this, and in some cases, it may just be. However, it is important to understand that it’s rarely as simple as filing a claim and receiving a payout. 

Keep in mind that every insurance company has a financial incentive to pay out as little as possible. As such, they are going to do everything they can to minimize your coverage, whether that means paying you less than you deserve or denying your claim altogether. Unfortunately, it’s not at all uncommon for insurance claims to be rejected. There may be a valid reason behind the denial, or there may be no apparent reason at all. Below, we’ll list a few explanations your insurance company may give for denying you coverage:

  • Claim submitted after the policy’s deadline.
  • Your policy’s exclusion clause applies to the cause of property damage.
  • Premium payments are late or absent.
  • Lack of proof or record of losses incurred.
  • The insurance adjuster believes the claim to be suspicious or fraudulent.
  • You’ve reached or surpassed the coverage limits.
  • You didn’t take any steps after the initial loss to prevent additional damage.

Remember, just because your insurance company supplied a reason for the denial doesn’t mean it is inherently valid. There are many ways an insurer may act in bad faith by denying a legitimate claim. We’ll discuss these bad faith tactics in more detail later on. 

What Can You Do If Your Insurance Claim is Denied?

Your insurance company will send you an official letter stating why they are refusing your claim. This letter should include how your policy’s particular language justifies the claim denial. Carefully read over the letter and compare their reasoning to your own knowledge of your policy. There is little you can do if your claim is denied for a valid cause, such as the premium not being paid or if that sort of damage is specifically excluded from your coverage.

However, if after comparing their explanation to your understanding, you still feel you deserve coverage for your property damage, there are certain steps you should take. First, go to your insurance company’s claims adjuster. Though it’s not simple to persuade a business adjuster to reconsider a claim denial, if you can prove where coverage is promised in your home’s insurance policy, you should at least try.

If addressing your situation with your insurance company’s claims adjuster does not provide you with any satisfaction, you will need to submit a formal appeal. You only have a certain amount of time to do so, so make sure you adhere to the appeals deadline. Your homes insurance policy should outline the appeals procedure you must follow.

When you file a formal appeal, your refused claim will be reviewed further. Include as much information and documentation as possible with your appeal as evidence that your damages should in fact be covered. The more structured you are when presenting this material, the more likely you are to receive a thorough reconsideration of your refused claim.

How To Dispute Insurance Claim Denial

If you are unsuccessful in appealing to your insurance carrier, you can submit a complaint with your state’s insurance board, which will investigate your refused claim. The department should look into your claim and provide you guidance on what you should do next. They will usually determine if your complaint is legitimate and if so, will contact your insurance provider directly to advocate for a more equitable settlement.

They will also likely advise you to obtain an experienced insurance claims attorney if you haven’t already. If your property insurance claim was wrongfully denied, an attorney can assist you in exploring your legal alternatives and represent you in subsequent claim-fighting efforts. 

Rather than wait until the appeal’s denial, however, it is typically in a policyholder’s best interest to obtain a lawyer before even speaking with the insurance company. This is due to the fact that insurance providers will begin gathering evidence against you from the moment you register a claim. From the very beginning, they will be looking for reasons to support a rejection of your claim by gathering evidence, documents, and even statements from you that make it appear as though the property damage was your responsibility.

Having an attorney from the get-go can ensure that your insurance company doesn’t use your words against you or use any bad faith tactics to deny you coverage or try to pay you less than you deserve. In addition, insurers may take your claim more seriously if they know you have an attorney watching their every move and ready to dispute their potentially illegitimate claim denial.

When a Denial May Be a Sign of “Bad Faith”

Your insurance company will happily collect the premiums you pay on a regular basis with no problem at all. In an ideal situation, your insurer will pay you quickly and in accordance with your policy’s conditions. However, when it comes time to submit a claim, suddenly the lines become blurry and you face hesitance or the complete rejection of your payout. If this occurs, your insurance company may be violating its legal duty to operate in good faith.

When dealing with an insurance company that operates in bad faith, you most certainly have legal alternatives. However, it is important that you are first able to spot these bad faith tactics when they are right in front of you. Below, we’ll list a few red flags that indicate that your insurer may not be acting in good faith when denying your claim:

Lack of Communication

When dealing with a property insurance claim, your insurer has a duty to effectively communicate with you. Following the filing of a claim, an adjuster should call you to explain the situation. The adjuster or another representative from the insurance company should be ready to answer your questions and resolve your concerns. If there is a breakdown in communication, your insurer may have failed to fulfill its legal obligations.

Improper Investigation

Before denying a claim, your insurer should conduct a thorough investigation into your claim. You may have a legitimate bad faith legal claim if you can prove that the investigation was partial or insufficient or if your insurer simply did not investigate at all.

No Legitimate Reasoning

Another sign of bad faith is if your insurance provided no valid justification for their refusal of your claim. Insurers routinely refuse claims for a variety of reasons, but if your provider failed to explain the rejection to you or denied your claim without a valid reason, you should look into whether it acted in bad faith. After all, your insurance company should be able to explain the refusal in simple, reasonable terms.

If you feel your insurer acted in bad faith by denying your claim, it is important that you reach out to an attorney who can investigate the matter and prove once and for all that their denial was wrong.

Why You May Need a Lawyer

Property insurance policies can include sophisticated legal jargon that, without a solid legal background, may be difficult to understand. A knowledgeable Florida insurance claims attorney can help home and business owners in Fort Myers and the surrounding areas comprehend their policy’s terms and ensure that they have a legitimate claim.

As a policyholder, you also possess the legal right to dispute an insurance claim decision that you believe is unfair or insufficient. A lawyer can help you take legal action against your insurer by seeking reimbursement for covered losses should they refuse to review your claim or delay payment.

At McIntyre & Bermudez, PLLC, our insurance claims attorneys work to ensure that property owners who have suffered damage for reasons beyond their control obtain the compensation to which they’re entitled under their insurance policy. We are ready and willing to put in the work to refute our customers’ unsatisfactory claims and investigate for signs of bad faith tactics.

Insurance Claim Denied? Have Your Claim Reviewed Today

If you have suffered losses as a consequence of a hurricane, storm, flood, or other disaster and are looking to file a claim, or if you believe your insurance company has unfairly denied or devalued your claim (as we’ve seen with many Hurricane Ian insurance claims), McIntyre & Bermudez, PLLC can help. Don’t hesitate to contact our Fort Myers property insurance claims attorneys to learn more about what we can do for you. To schedule a consultation, give us a call at 239.935.8426 or fill out our online intake form today.