Common reasons for denying homeowner’s insurance claims

Homeowners might assume that once they purchase an insurance policy for their residence, they will be covered in the event of theft or damage. Unfortunately, however, claims can be denied.

Here are the most common reasons for denying homeowner’s insurance claims.

The damage or theft is less than the cost of the deductible

The deductible is the amount you must pay before your insurance company will give you money for the claims you file. Should the damage or theft total less than your deductible, the payment falls on you. Document this payment so that you are more likely to receive an insurance payout if more damage or theft occurs in the current year of your contract.

The claim does not involve a covered peril

A common misconception amongst homeowners is that their insurance policy covers any damage to their home. However, the contract between you and your insurance provider should specify what perils are covered. Anything not specified is not a covered peril, which means your homeowner’s insurance claim could be denied in part or in full.

The claim involves a named exclusion

Nearly all homeowner’s insurance policies will have named exclusions. The three most common nationwide are floods, earthquakes and water backup. Other exclusions are included based on location. For example, wildfire damage may not be covered in areas prone to wildfires, or hurricane damage in coastal regions.

The claim involves the liability of a third party

Your policy should include liability coverage, which is meant for when other people are hurt because of your home or your actions. If your claim involves an injury to your or your family based on the actions of a third party — such as a contractor — your policy will not cover it. Instead, the third party’s insurance company would be responsible for paying.

The claim centers on a maintenance issue

Homeowner’s insurance policies are meant to cover sudden problems with the home that could not have been prevented by the homeowner. For example, if a tree falls on the roof during a storm, the damage will most likely be covered, but if the roof collapses because of poor maintenance, the claim will be denied. Insurance companies expect homeowners to properly care for their residence.

If you are struggling to understand the terms of your policy, ask your insurance broker to go over them with you.