You've just experienced a home fire — your belongings are lost, and your home has suffered serious damage. After filing your insurance claim, you find out that your insurer has underpaid or denied the claim. At a time when you need support the most, the insurance you've faithfully paid into for years is failing you. Sadly, this situation happens more often than it should, which is why it's important to understand the common reasons fire insurance claims are denied or underpaid.
Unfortunately, many insurers will work hard to find any excuse to underpay or deny a claim. It's crucial to know your rights and know that you have the power to challenge their decisions. To help you navigate this process, let's discuss the five reasons fire insurance claims are denied or underpaid and what you can do to dispute them effectively.
1. Insufficient Coverage
One of the top reasons fire insurance claims are denied is what insurers call "insufficient coverage". This might mean that a particular type of fire isn't covered in your policy, or it could mean that your policy only covers damage directly caused by flames and not damage due to smoke or the water from fire sprinklers.
While your insurer is only required to pay for damages covered in your specific policy, sometimes insurers will wrongfully deny fire insurance claims you are covered for. It's important to read your homeowner's insurance policy carefully. If you suspect that the fire damage to your home should be covered, and you're being wrongfully denied, an insurance dispute attorney can confirm your suspicions and recommend a plan of action to get the coverage you need.
2. Suspected Fraud or Arson
Fraud or arson are two of the most common reasons insures use to deny your claim. Insurance companies may try to prove that the insured person in your home intentionally set fire to the property to make an insurance claim. This is a frustrating way for insurance companies to attempt to avoid payment, as quite often a trial is necessary to prove that arson was not a factor.
In this case, it's important to seek experienced representation as soon as possible. In addition to fighting for your insurance claim, suspected arson must often go to trial for resolution, so it's important to make sure you have a strong legal team to defend you.
3. Valuation Disputes
Insurance companies commonly dispute your valuation to avoid paying your fire insurance claim. For example, if you claim the cost of your home based on the materials you'd need to rebuild it, but your insurance company claims that it is worth much less than what you've claimed, you will be denied based on that valuation dispute. This is just one of the ways insurance companies work hard to pocket your money.
While it can be tough to prove the actual value of your home, having records of when your home was built, the maintenance you've completed on the home, and photos of its condition before and after the fire, can help your insurance dispute attorney get you your claim. Never settle for your insurance company's first offer. You know the damage that's been done to your home — you deserve adequate coverage.
4. Damage Disputes
As mentioned before, not every fire insurance policy covers damage outside the fire itself. Some fire insurance policies will only cover the damage caused by fire and do not cover damage caused by smoke or water, even though those damages were indirectly caused by the fire.
This can lead to damage disputes that can result in an insurer denying your fire insurance claim. If your insurer claims that much of the damage done to the home was caused by smoke or was indirectly caused by the fire, they may not fulfill your claim. For example, the smoke from the fire caused the damage to the upper level of your home and not the flames themselves.
Damage disputes can be tricky to resolve. It is important to carefully read your policy and consult with an insurance dispute attorney who can read through your policy as well to understand and enforce your rights.
5. Defective Design or Workmanship
The last of the five reasons fire insurance claims are denied is defective design or workmanship. This means that the insurer is saying some component of your home was poorly crafted and installed in the first place. This can happen if your contractor did not have the proper licensing and permitting for your home, or used a building material that has since been recalled for poor fire protection or faulty performance.
Again, this is a tactic used to avoid paying for your insurance claim. The insurer expects that you will not be able to come up with satisfactory proof that their reasoning is wrong.
This is why it's so important to be familiar with your homeowner's insurance policy, and to have the right representation on your side. You pay your insurance premiums on schedule — it's your insurer's job to then step up when you make a rightful claim.
If you've experienced a fire or damage due to fire and your insurer has denied your claim, get in touch with The Lane Law Firm. Our team of insurance dispute attorneys has the experience necessary to evaluate your fire insurance policy, and make sure you get the coverage you deserve. For more information, read about the types of insurance dispute representation our team offers, or schedule a free consultation with one of our attorneys today.
