How to Dispute a Homeowner’s Insurance Claim Denial

A homeowner’s insurance claim denial can happen when insurance companies decide to not provide coverage for your damaged home. Insurance companies may have their own reasons to deny homeowner’s insurance claims. Homeowner’s insurance companies often deny claims based on whether they are covered by the insurance policy and the level of insurance the homeowner has. The amount of documentation provided with the claim, or the suspicion of fraudulent or negligent behavior by the homeowner, can also lead to a denial. In some cases, an insurance company may deny a valid claim out of bad faith.

On a desktop sits a calculator, pair of glasses, a pen, and a homeowners insurance claim form.

The reasons homeowner’s insurance companies may deny your claims can vary, such as your failure to stop damage to your house or not updating the insurance company on new developments in your claim. The types of homeowner’s insurance claims that are frequently denied are flood and earthquake claims. 

You can dispute a homeowner’s insurance claim denial by looking back over your submitted claim and what your policy covers, making an appeal, filing a complaint to the Illinois Division of Insurance, or filing a lawsuit against your insurance company.

Why Do Homeowner’s Insurance Companies Deny Claims?

Homeowner’s insurance claim denial can occur if your insurance company thinks that your claim is not good enough to be paid. Denials of homeowner’s insurance claims could be based on requirements set forth by the insurance company that were not met by the homeowner making the claim. Denials of homeowner’s insurance claims can also be based on reasons found during the investigation and claim review process.

Homeowner’s insurance claims may be denied if the insurance company determines the claim does not fall under the coverage outlined in the insurance policy, or the type of claim is included in the insurance policy’s exclusion clause. The majority of homeowner’s insurance policies provide coverage for damage to a home’s interior or exterior. Damage to personal items, or the loss of such items, may also be covered in your homeowner’s insurance policy. 

Personal injury claims by people invited onto the property may be covered by homeowner’s insurance, but coverage in this area is limited and may depend on your insurance company’s policy. Homeowner’s insurance coverage may not typically extend to personal liability claims if injuries came from criminal activity, vehicular harm, or intentional harm. Lack of insurance coverage for certain types of property damage is the most common reason an insurance company will deny a claim. Exclusion clauses in an insurance policy can explicitly say whether your insurance will provide coverage for your claim. For example, a denied flood claim can happen if the insurance policy stated in the exclusion clause that flood claims are not covered.

 Reasons Insurance Companies Use to Deny Claims

Reasons vary as to why insurance companies will deny claims. An insurance adjuster with your company will review your claim, the insurance policy, and the circumstances of your situation. 

Common reasons of homeowner insurance claim denials include:

  • Lack of coverage or an exclusion clause.
  • Insufficient insurance coverage. If you are underinsured, it may be a reason for your claim to be denied.
  • Fraudulent or negligent behavior by the homeowner making the claim.
  • Lack of documentation. The insurance adjuster will need proof of property damage, and if your documentation cannot show that, it may be a reason for the claim to be denied.
  • Failure to reduce the damage to your property.
  • Not providing updates on your situation to the insurance company.

The insurance company acting in bad faith to deny your claim should not be ruled out as a possible reason. If you suspect your insurance company has acted in bad faith, contact a bad faith insurance lawyer.

Which Types of Homeowner’s Insurance Claims Are Frequently Denied?

Property insurance claims may be denied for a variety of reasons. The types of claims that are frequently denied are theft and earthquake claims. Theft claims can be denied based on fraud or negligence, or a failure on the part of the homeowner to reduce the risk of theft. Homeowner’s insurance claims may get denied if an insurance adjuster suspects that the homeowner is using property damage fraud to get their claim paid. Negligence in preventing property theft and failing to mitigate property theft can be separate reasons. If you are negligent in locking your home doors, or failed to call the police when you know a thief has been in your house, the insurance company may deny your claim. 

Earthquake claims are also routinely denied by many insurance companies because many policies do not provide coverage for damage caused by earthquakes. It may be helpful to seek out additional insurance coverage for earthquake claims.

How Do You Dispute a Homeowner’s Insurance Claim Denial?

You have options to look for in the homeowner’s insurance claim denial process. Disputing homeowner insurance claims begins with reviewing the denial letter, your own claim, and the insurance policy. Reviewing the denial letter can help you understand the main reasons the insurance company is choosing not to pay your claim.

The next step can be to appeal the denial of your claim to the insurance company or to file a complaint to the Illinois Division of Insurance. Filing an appeal to your insurance company to review your claim again, examining the insurance policy terms with the insurance adjuster, and starting another investigation can help you cover your losses. Filing a complaint to the Illinois Division of Insurance is an alternative step if the appeal was not successful. Filing the complaint to the IDI will come with a longer process of reviewing claims, documentation, and investigation into the claim process of the insurance company. If these steps are not successful, contact an insurance lawyer to review your homeowner’s insurance claim denial and determine whether the insurance company acted in bad faith when denying your claim.

Chicago personal injury and workers’ compensation attorney Howard Ankin has a passion for justice and a relentless commitment to defending injured victims throughout the Chicagoland area. With decades of experience achieving justice on behalf of the people of Chicago, Howard has earned a reputation as a proven leader in and out of the courtroom. Respected by peers and clients alike, Howard’s multifaceted approach to the law and empathetic nature have secured him a spot as an influential figure in the Illinois legal system.

Years of Experience: More than 30 years
Illinois Registration Status: Active
Bar & Court Admissions: Illinois State Bar Association, U.S. District Court, Northern District of Illinois, U.S. District Court, Central District of Illinois
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