While there are no laws specifically stating that you’re required to carry home insurance, the thought of not having insurance when you need it is enough to give anyone indigestion. So what are you supposed to do when that safety net you thought had you covered falls through and your claim is denied? It might be a difficult and drawn out process, but there is recourse available to you should you need it.
Familiarize yourself with your policy
The first thing you want to do before even buying your insurance policy is to make sure you understand exactly what your policy does and doesn’t cover. This sounds like a dumb one, but it’s really easy to nod along while your insurance agent talks about negligence and voiding your policy. Equally it can be quite difficult to formulate ‘intelligent’ sounding questions, so when you don’t quite grasp something say so; the agent will understand how important it is that you get your mind around what you’re buying.
Naturally you’ll forget the details as time goes on, so before making a claim review your policy so that 1) when you contact your insurer you’ll be able to describe the claim you want to make within the context of your policy, and 2) you will hopefully be made aware of any way you may have violated you policy. Denied claims are definitely something to be avoided as not only will you have voided the terms for your no-claims bonus (should you halve one), but it might even be possible that your policy could be terminated.
Discuss the Claim with Your Agent
Before filling a claim make sure to discuss it first with your insurance agent. You be able to decide whether or not to make your claim based on their response. However, since you and your insurance agent might have conflicting interests (depending on their relationship with the company holding guaranteeing your policy); it might be a good idea to seek out a third-party insurance agent for a second opinion. This will cost a bit of money, but they will assess the damages and give you an honest opinion on your claim (as well as providing you with documentation should you ever want to litigate).
Keep Close Records
If you claim is denied make sure you receive proper documentation from your insurance in the form of a detailed explanation of the denial. First, this will be invaluable when appealing. Then this will reveal whether or not the denial is based on so-called ‘processing errors’. For example, claims denied on the basis of violation of timely filing clauses have dubious legal status in many places, and if they can’t be overturned by a direct appeal to the insurer, they still stand a good chance of being successfully litigated.
Only a small percentage of denials are ever contested (about 1%), though of those appeals about 50% are successful. When making the appeal make sure to use your policy contract to refute the basis of the denial set out in the denial explanation you’ve received from your insurer.
Contact a Lawyer
If you appeal is rejected find a lawyer who specializes in this sort of litigation. Often lawyers will give free consultations to sort out whether your prospective law suit has proverbial legs. Be prepared, however, for a lengthy process that can take years.