When a natural disaster occurs, such as a hurricane, earthquake, or fire, the first thing you should do is contact your household insurance to file a claim. However, purchasing insurance and filing a claim does not guarantee full compensation for damages, and a home insurance claim may be denied.
One way to ensure that your major insurance claim will not be denied is to learn about the various reasons why insurers may deny a claim. The following list is not exhaustive, but it contains many of the most common reasons why applications are denied
Negligence
Homeowners insurance is supposed to protect against many accidents, but if the damage was caused by the negligence of the homeowner, this can be a reason for denying a claim. Homeowners’ insurance covers accidental damage or loss, but not damage caused by negligent maintenance of the property. For example, if the roof of your home collapses as a result of a hurricane, this would be considered an accident, not negligence. However, if your roof collapsed because your home had termites that you did not treat. Your insurer would likely refuse to pay for the damage.
The complaint does not state the facts
Injured parties are expected to act truthfully when asserting an insurance claim. If the insurer discovers after the fact that you did not tell the truth on the initial claim, your policy will be terminated and your claim may be denied. If you cancel your policy, the premiums you paid will usually be refunded to you, as if the policy had never been issued.
Premiums are not paid
Insurance companies are contractually obligated to provide the coverage guaranteed in the policy. The policyholder has no contractual obligation to pay premiums and late or missed payments are not reported to the credit bureaus or forwarded for collection. However, policyholders must pay their premiums on time if they expect their insurers to honor the contract. Regardless of the number of years, the policy has been in force. The claim will be denied if the policy is terminated for non-payment of premium on time.
Damage caused by an excluded event, such as a flood
Household insurance is not a blank check for all disasters that can cause damage to your home. Even if something happened through no fault of your own, it may not be covered by your policy. For example, flood damage is not covered by household insurance, but is covered by flood insurance. Also covered are landslides, earthquakes and other earth movements, and damage caused by political unrest or terrorism. Different policies may have their own exclusions that you should be aware of. Your insurance representative can also help you find additional insurance to cover some of these risks.
The amount of damage was less than the deductible
If your home insurance policy has a deductible. This is the amount you must pay or cover in the event of a loss. Your insurer will only pay for damage that exceeds this amount. Depending on the type of accident or damage, your policy may have different deductibles.
The damaged property was used for business purposes, not personal use
If you operate a business from your home or have business premises in your home during non-business hours. The property may be excluded from private home insurance coverage. Business insurance is required to cover property owned or used by the business. Even if you only operate a small business out of your home, you may be denied a claim. If you do not have a specific endorsement on your home insurance policy. That states your property is covered.
A simple way to reduce the likelihood of a home insurance claim being denied is to make sure the policy is tailored to your specific needs. We can help you understand what your NYC home insurance policy should cover and ensure that you are protected in the best way possible.
