Insurance is such a strange product in that you buy it hoping you never have to use it, sort of like a fire extinguisher. However, unlike a fire extinguisher you can’t just take your home insurance policy out into the yard and play with it on a whim. It’s devastating then if your property is damaged and the insurance you were otherwise relying on denies your claim. That there even is the perennial joke that insurance companies are tight-fisted indicates that claim denials are common enough, so what do you do when you’re claims denied—certainly not roll over (at least not yet anyway).
Make Sure You Understand Your Policy
Before ever leaving you insurance agent’s office, make sure you understand the details of the product you are buying. It can be difficult to ask specific questions, so instead simply tell your agent when you don’t fully comprehend anything. Equally feel free to take notes. Naturally you are going to forget exactly what the policy says, but you’ll have a more substantial gist of what you are entitled to. Now when your property is stolen or damaged take a little bit of time to review your policy (assuming it hasn’t been destroyed) so that when you do contact your insurance you have not only had a refresher course on your policy, but you are able to describe the nature of your claim in the context of your policy.
Contact Your Agent
Before making your claim officially, be sure to discuss it with your insurance agent. On some policies there are serious repercussions for making a claim and being denied. For example you can lose your no-claims bonus, which is worth it if you have to rebuild your home—but certainly not worth it if your insurance agent thinks that a denial is unavoidable.
Keep a Paper Trail
In the event your claim is denied make sure you receive proper documentation along with an explanation of the reasons for denial. This will make the process of checking the denial against the actual terms of your policy infinitely easier. Equally make sure you document the costs of all out-of-pocket costs including, repairs, nights in a hotel, rental cars etc. Though requiring a bit of foresight, keeping close records of preventative maintenance and the like can help disprove accusations of policy violations.
Appeal
The numbers appear to indicate that only about 1% of denials are ever appealed—and half of appeals see some sort of relief from their insurers. Fill out the appeal using the explanation of denial and your policy to set forth a cogent rebuttal.
Lawyer Up, Contact a third-party Agent
Should your appeal be rejected, there are private insurance agents out there who will assess the damage and your claim independently and will give you some sort of realistic grounding as to the viability of suing your insurance company. Equally, there are lawyers who also specialize in this sort of litigation, lawyers who will also likely be open to free consultations to discuss your claim against your insurance company. Though be aware that litigation can often take years to produce any results, so if you have gotten to this point be prepared for a long fight.
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