4 Reasons Insurance Companies Will Deny Your Fire Claim
A house fire or wildfire that reaches your home can be devastating. You may lose everything you own, suffer physical injuries and experience the death of beloved pets. One of the first steps toward rebuilding and moving forward is collecting financial compensation for the fire from your insurance company. Unfortunately, an insurance company may deny your fire claim based on one or more reasons – leaving you with limited options for recovery.
Non-Payment of Your Insurance Premium
If you have not kept up with paying your insurance premiums, you may find that you do not actually have coverage when you attempt to file a fire claim. This is a valid reason for an insurance company to deny your claim. However, insurance companies have to follow certain protocols when canceling a client’s coverage for nonpayment. They must warn the policyholder in writing in advance of canceling the policy, for example, and provide a grace period. If your insurer canceled your policy without first taking these measures, you may be able to argue that the rejection is invalid.
Lack of Coverage – Not a Covered Event
It is important to carefully read the terms, conditions and fine print of your insurance policy. Most homeowners and business insurance policies come with exclusions – situations where damage is not covered. Fire damage will only be paid for, for example, if this specific type of loss is listed as a covered event on the policy. Most standard homeowners insurance policies include fire insurance. If you live in an area of Arizona that is susceptible to wildfires, however, you may wish to buy supplemental fire insurance coverage for extra protection.
You may find that your fire claim has been rejected by an insurance company due to suspicions that you caused or contributed to the fire through reckless or illegal activities. For example, if the insurance company has evidence that you conducted your own electrical repair work without a permit, this could exclude your home from fire damage coverage. The same is true if there is speculation of arson (burning down your home or business on purpose, such as in an insurance fraud scheme).
In some cases, an insurance company will deny a fire claim simply because the claimant was missing information on the required paperwork. Missing information or administrative errors can delay your payout and lead to claim denial based on the insurance company’s inability to process the claim. You may be able to remedy the issue and have your denial reversed by properly filling out the necessary forms and providing proof of your losses.
What to Do if an Insurance Company Has Denied Your Fire Claim
If you are running into problems when seeking insurance benefits for fire damage, such as an insurance company denying your claim, remain calm. A denial is not necessarily a final decision. There are steps that you can take to appeal the decision and potentially qualify for coverage. Here’s what to do:
- Read the rejection letter or contact the insurance company to learn the reason for the denial.
- Ask if there is something that you can do to be eligible for coverage, such as resubmit forms.
- Request an internal review of your claim from someone else at the insurance company.
- File a complaint against the insurer with the Arizona Department of Insurance for an unfair denial.
- Contact a fire insurance claims attorney in Phoenix for assistance going up against the insurance provider.
You may have grounds to bring a bad faith insurance lawsuit against the insurance company for the wrongful denial of your fire claim. If so, a lawyer can help you collect evidence and pursue damages against the insurance company for the challenges and inconvenience of denying your claim. Do not take a fire claim denial without a fight. Speak to an attorney for assistance and counsel.