Filing a property insurance claim is like walking through a minefield in the dark.
Here’s the truth. A report from Weiss Ratings indicated that in 2023, 30% of homeowners insurance claims submitted by top insurers were denied. Almost 1 in 3 claims didn’t get approved.
The good news?
Homeowners can significantly increase their odds of getting the payout they deserve by taking certain steps. Property insurance claims assistance is not just about filling out paperwork. It’s about understanding what the insurance adjuster is looking for and providing it to them.
What You’ll Learn:
- The Importance of Documentation
- The Timeline You Need to Know
- Common Mistakes That Result in Denied Claims
- When to Hire Professional Assistance
- The Process for Appealing a Denied Claim
The Importance of Documentation
The biggest single reason claims are denied?
Lack of documentation.
Insurance companies are not going to pay out on claims unless there is documented evidence of damage. Photos, receipts, and other records are necessary for an adjuster to verify what was lost or damaged. A recent Triple-I/Munich Re survey found that 47% of homeowners had an inventory of possessions to help document losses when a loss occurs.
In other words, more than half of all homeowners do not have this vital information prepared.
Here’s the solution. Take pictures before the loss occurs. Photograph the entire home. Walk through every room, capturing every piece of furniture, every appliance, and every valuable item. Store these pictures in a safe place outside of the home.
After the damage, take more pictures. The “after” photos should be compared to the “before” pictures to create an airtight record that the adjuster cannot ignore.
Keep receipts for major purchases. Serial numbers are important, too. The more detailed the documentation, the less likely insurers are to fight the value placed on these items.
The Timeline You Need to Know
Time is of the essence in the claims process.
Insurance policies have strict timelines for reporting losses. Miss those windows and the claim is toast. Most policies have a requirement to report damage within 24 to 72 hours.
But here’s the thing…
A recent J.D. Power 2024 Property Claims Study showed that the average claims cycle time now is 23.9 days. That’s over six days longer than the previous study just two years ago. For catastrophic losses, that average cycle time is 34.2 days.
What does that mean for homeowners?
Filing the claim quickly will not necessarily speed up the resolution. In fact, it may not speed it up at all given some of these timelines. But filing late will almost certainly cause problems. Get the claim filed as soon as possible and then be prepared for the process to take longer than expected. Contacting a property damage attorney early on can help expedite the property insurance claims process and apply pressure to insurers to respond appropriately.
Common Mistakes That Result in Denied Claims
Most claims that are denied for one reason or another follow the same pattern of errors.
- Thinking everything is covered. Standard policies exclude damage from floods, earthquakes, and slow deterioration. Many homeowners only realize these exclusions when they file a claim. Reading the policy well before disaster strikes will help prevent unpleasant surprises.
- Waiting too long to report the damage. Delayed reporting accounts for approximately 15% of all denials. Insurance companies argue that the delay impairs their ability to properly investigate the loss.
- Making permanent repairs before the adjuster arrives. Temporary repairs to prevent further damage are both necessary and wise. Full repairs before an adjuster can document the damage? Asking for denial.
- Inflating the losses. Insurance companies investigate all claims. Submitting exaggerated damage or inflated values will set off fraud alarms, possibly resulting in total denial, as well as termination of the policy.
- Accepting the first offer without negotiation. The first payout is often negotiable. Many homeowners leave thousands on the table by immediately accepting a lowball offer.
When to Hire Professional Assistance
Not every claim requires professional assistance. Claims that are simple, straightforward, and clearly covered by the policy often run smoothly.
But certain situations require an expert.
Large losses in excess of policy limits create complex negotiations. Disputes over the coverage interpretation require someone with knowledge of policy language. Bad faith denials, where the insurer ignores a valid claim, require legal intervention.
When do you know it’s time to call in the cavalry?
Warn signs to watch for. The adjuster’s estimate is unreasonably low. The insurer is dragging their feet with no real explanation. Requests for additional documentation seem endless. The denial letter cites policy exclusions that do not seem applicable.
Public adjusters represent policyholders, not insurers. They handle the entire claims process and negotiate on the homeowner’s behalf. Attorneys become necessary when insurers are acting in bad faith or when litigation becomes likely.
Professional help often pays for itself in the form of a higher settlement.
The Process for Appealing a Denied Claim
Denial of a claim is not always the end of the line.
The first step is to fully understand why the claim was denied. The denial letter will usually specify the reasons for the denial. Read it carefully and compare those reasons to the actual language of the policy.
Gather additional evidence to address the stated concerns. If the documentation was lacking, provide additional documentation. If the issue was over coverage, find language in the policy that supports the claim.
Submit a written appeal. Be specific. Reference policy numbers, claim numbers, and the specific reasons for the denial. State clearly why the denial was improper.
Document all communications. Dates, names, and notes on what was discussed all become important if the issue has to be elevated.
Set deadlines for response. Follow up if those deadlines are not met. Persistence is important.
If the appeal is denied internally, external avenues exist. State insurance departments will process complaints against insurers. Litigation is always an option for bad faith denials.
Preventing Future Claim Problems
Smart homeowners think about claims before they happen.
- Review the policy every year. Coverage changes as home values increase and possessions accumulate. A policy purchased five years ago may not cover current replacement costs.
- Purchase endorsements for specific perils. Flood insurance. Earthquake coverage. Sewer backup protection. These endorsements cost extra but prevent major gaps in coverage.
- Maintain the property regularly. Insurers love to use neglected maintenance as a reason to deny claims. A roof that should have been replaced years ago is not going to get covered when it finally gives way.
- Keep that home inventory current. New purchases should be added to the list. Renovations need to be noted. The inventory is only valuable if it accurately reflects the current situation.
The Bottom Line
Maximizing a property insurance claim comes down to preparation, documentation, and persistence.
Take a complete home inventory before a loss occurs. File the claim as soon as possible after the damage is discovered. Document, document, and document some more.
Read the policy and know what is actually covered. Don’t assume. Read the exclusions. Know the deadlines.
Don’t accept the first offer. Appeal a denial if it seems wrong. Hire professionals if the stakes are high or the process becomes too complex.
Insurance companies handle millions of claims. They have well-oiled machines designed to minimize payouts. But homeowners who understand the systems in place to process those claims and prepare accordingly will get the best results.
The property insurance claim process is not set up to be homeowner-friendly. But homeowners who play by the rules and arm themselves with the right information can even the playing field and get the coverage they’ve been paying for all along.
