In a perfect world, the claims process would be quick and painless, but homeowners insurance carriers can deny claims for many different reasons.

Taylor Medine Edited by Kelly Larsen Updated June 1, 2022

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Having your property stolen or damaged is already upsetting, and an insurance carrier denying your claim can make matters even worse.

Insurance providers can deny claims for various reasons — but the initial decision isn’t always final, and you have the right to dispute it.

Here’s what you need to know about why insurance carriers deny claims, and how to dispute them:

Two common reasons insurers deny claims include a lapse in coverage due to nonpayment, and waiting too long to file a claim. Here’s a deeper look at eight situations when providers may deny a claim:

Homeowners insurance typically provides coverage for theft and damage caused by specific events like fire, smoke, lightning, and hail. Perils — events that may cause damage — you might expect to be included in your policy could actually be excluded from coverage.

For example, flood damage caused by heavy rain or hurricanes typically isn’t covered by a standard homeowners insurance policy — you have to buy a separate flood insurance policy.

Earthquake damage is usually excluded from a homeowners or renters policy as well, but purchasing additional earthquake insurance may be worthwhile if you live in an area prone to earthquakes, like California.

Homeowners insurance may also exclude acts of war and nuclear accidents. However, the U.S. government requires nuclear power plants to hold liability insurance to cover repair costs if a nuclear event causes damage to the area surrounding its power plant.

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Insurance carriers may require you to file the claim within a certain amount of time in order to approve it. Taking too long to submit your claim could result in a denial, so it’s always a good idea to file your claim as soon as possible. Read your insurance policy terms to find out when the deadline is to file your claim.

Learn More: A Guide to Your Homeowners Insurance Declaration Page

When a covered event damages your home, the insurance carrier may expect you to make temporary repairs to prevent further damage until there’s a more permanent fix. If you don’t, any additional damage that happens after the event may not be covered.

Say a window breaks in your home, and you don’t cover it with a tarp or piece of wood. You could be held liable for water damage to your home that occurs when the interior is exposed to the elements.

Insurance providers can deny claims when you don’t have enough evidence to back them up. If your laptop is stolen from your home, and you don’t have receipts or documents to prove you owned it, the insurance carrier may have trouble accepting your claim.

That’s why it’s always a good idea to take photos or videos and get repair estimates before they’re performed as proof of household damage. It’s also wise to create an inventory of all your personal belongings, including their prices. This can help you quickly identify losses in the event of a burglary or natural disaster, and you won’t have to dig through receipts or rely on your memory when filing a claim for damages.

If you’re behind on premium payments, your insurance could lapse, and you won’t have coverage in an emergency. Paying your insurance premiums on time will keep your insurance policy active at all times in case a disaster happens.

Paying your premium up front or setting up automatic payments could ensure your payments are made on time so your insurance is there when you need it.

Check out: What To Do If Your Insurer Doesn’t Renew Your Homeowners Insurance

Your homeowners insurance doesn’t cover normal deterioration of your home over time. If your property, appliances, or other items are old, insurers could attribute damage to wear and tear and deny your claim.

For example, say hail causes damage to your siding. If the insurance carrier determines that your siding is defective or not properly maintained, it could refuse to give you an insurance payout under the wear and tear exclusion. However, you could try to dispute their claim of wear and tear with evidence that you’ve completed maintenance or made updates to your home.

If a negligent act results in property damage or theft of property, the insurance provider could decide not to give you a payout. If you leave your aggressive dog unleashed and he bites someone, your insurer likely wouldn’t cover the event. In that situation, you’d have to foot the bill for any legal costs or medical bills yourself.

Insurance carriers may deny a claim if there’s a concern you could be fabricating or exaggerating loss for financial gain. Fraud could include embellishing timelines and facts about how property damage or theft occurred. Contractors can also commit fraud by overestimating repair costs.

Covering your bases and keeping backup could help you prove that your claim and repair costs are legitimate. This could include calling the police to report a theft, taking notes, pictures, and videos of damage, and getting multiple quotes from contractors.

Learn More: Everything You Need to Know About Home Insurance Claims

If your insurance provider denies your claim or you don’t agree with your claim settlement, you have the right to question it. Take these steps to dispute a claim:

Filing a home insurance claim can count against you because claims history is one of many factors insurance providers consider when determining whether to insure you. With past claims on your record, an insurance carrier could consider you to have a higher risk of filing future claims, which could result in higher rates when you apply for a new policy.

During the underwriting process, insurance companies typically pull your Comprehensive Loss Underwriting Exchange (C.L.U.E.) report. This report outlines past claims and loss payouts for your car and home insurance.

Since insurance providers have different methods of determining insurance risk and rates, shopping around with multiple insurance carriers could help you find the most competitive rate for the coverage you need, even if you do have claims on your record.

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Disclaimer: All insurance-related services are offered through Young Alfred.

Taylor Medine is a Credible authority on personal finance. Her work has been featured on Bankrate, Experian, The Balance, Business Insider, Credit Karma, and more. She’s also the author of The 60-Minute Money Plan, a self-published intro to budgeting guide for people who hate budgeting.

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