Experiencing the rejection of a home insurance claim is stressful without a doubt. You think that the safety net is there, but everything collapses like a house of cards because of some hidden conditions you didn’t read properly.
The primary reason for rejections is always traceable to something in the policy. Homeowners either didn’t read everything carefully or didn’t fully understand what those policies actually meant.
If you know why claims get rejected, you’ll be in a much stronger position to make sure yours doesn’t.
Not Disclosing Relevant Information
Every home insurance policy is built on the principle that you’ll always provide complete and accurate information. If you don’t disclose all the information (whether intentionally or simply due to oversight), it creates a ground for rejecting a claim. You may think the information is unrelated to your situation, but it still works against you.
This information usually includes a previous claims history, home-based business activity, or minor renovations that may have changed the property’s value.
Home insurance policies always include a duty of disclosure where you’re required not only to answer the questions but also to share information that may appear later.
Claiming for Excluded Events
Every policy contains a list of exclusions. These are situations or events that the policy doesn’t specifically cover. Common exclusions include gradual deterioration, wear and tear, flooding, and pest damage.
If you don’t read the policy carefully, you’ll assume coverage that isn’t there. And you’ll discover the exclusion only when you submit a claim.
You must carefully read the exclusions section of any policy if you want to be on the safe side.
Not Maintaining the Property Adequately
Every insurer would expect you to take enough care of your property. Most policies include maintenance conditions that directly affect whether the claim will be honored.
A claim for water damage caused by a deteriorating roof that had been in place for a year is more likely to be disputed. And a claim caused by sudden or unexpected storm damage will likely be accepted. Insurers in such positions claim that the damage was foreseeable (and preventable) through reasonable maintenance.
Always carry out maintenance regularly and keep a record of it. It will support your position if a claim is questioned.
Not Reporting Issues Promptly
Most insurers want you to report the claim in a specific timeframe. They also ask you to address the damage as quickly as possible once it occurs.
If you discover the damage and wait for weeks before reporting it, or let it worsen, it will give insurers grounds to question the claim.
You must act when something happens and document the damage thoroughly with photos. Notify your insurer of the damage to protect your claim from the very beginning.
Underinsuring Your Property
This doesn’t necessarily result in full rejection. But it may lead to reduced payments and leave you out of pocket. The insurer may apply a reduction to any claim if the sum insured on your policy doesn’t reflect the actual rebuild cost of your property (or the full value of your contents).
It’s important to review your coverage levels regularly (particularly after renovations). It will make sure what you’re insured for fully reflects what you’d need to put things right if the worst happens.
You’ll save yourself a lot of headache and frustration if you understand every clause of your policy before something goes wrong. Doing it in the middle of a claim leaves you with options you will never want to take.
