Some people will do everything in their power, including fighting themselves for money. Corporates and institutions in other financial sectors will go to great lengths to ensure they make profits. Insurance firms are not an exemption to this principle. Most insurance firms often attempt to decline to pay for policyholders’ claims where there are legitimate reasons for compensation due to property damage. In such circumstances, a policyholder is usually put between a rock and a hard place; and will often need professional intervention. If policyholders do not get the help they require, they might go bananas or develop stress-related complications such as panic and anxiety.
“I’m sorry, we can’t honor your claim,” are the most dreaded words a policyholder can ever hear. These seven words can break your world into a thousand pieces. A perfectly ordinary day can turn out to be your worst day. It will take more than courage to stomach the disappointment. So what do you do when the grey clouds cover the sunny days? At 1st Response Public Adjusters, we believe that insurance firms should not get a free pass when it comes to compensating policyholders who religiously paid their premiums due to negligible errors.
Why Insurance Firms Deny Providing Settlement Claims
Insurance firms are notoriously known for giving policyholders something with one hand, and taking it away with the other hand. It is crucial to know how and why insurance firms reject providing settlements for claims that should otherwise be successful. Knowing these reasons can help you get out of the dark woods and maybe give you a shot at getting the compensation you deserve. With that said, let’s go through some of the reasons insurance firms give to avoid settling most claims to a policyholder.
a) Expired Coverage
Expired coverage is the most obvious reason why most claims are denied by insurance companies. If a policyholder had paid premiums for a given period to cover a policy that was valid for 12 months and he or she suffered a loss after the twelfth month, the insurance company will not be in a position to compensate the policyholder unless he or she had renewed the insurance cover.
b) Inaccurate Application
Providing inaccurate information when applying for an insurance cover can invalidate your policy. Most people make mistakes when purchasing a policy. Such mistakes include not disclosing the right information about the property you are insuring. Although the inaccurate information provided may be given to the insurance firm mistakenly, the insurance company may use this reason as a ground for not settling your insurance claim.
c) Not Following the Claims Process
Insurance firms believe that due procedure should be religiously followed. Failure to follow the right procedure while filing for a claim can jeopardize the whole process. For instance, if a claimant had insured his or her house against water or flood damage and he or she suffered the said loss, the policyholder should notify his/her insurance firm on time so that the insurer can send professionals to evaluate the loss. Filing for a claim without going through the evaluation process can lead to claims disputes or denial of a claim settlement.
d) Policyholder’s Negligence.
Most policies come with a clause that demand policyholders to take ‘reasonable care’ or ‘duty of care.’ In simple terms, this clause requires policyholders to exercise a high degree of care or practice precaution so that they do not expose the property to unnecessary risks. Failure of a policyholder taking reasonable care can lead to insurance firms contesting claims for petty or dubious reasons. Policyholders should be able to explain to their insurer how the damage to their property came about or the reason and circumstances that lead to property loss.
e) Your Claim Not Meeting the Criteria
If strong winds knock tiles or blow away your roof, you may think that you have nothing to worry about since you had taken a ‘storm damage’ insurance policy. However, you may be shocked to find out that you do not qualify to be compensated by your insurer. If you take a look at the terms set out in the policy documents of the three largest home insurers (Lloyds, Axa, and Aviva), the wording is clear that they will look for proof that confirms that the wind speed was 55mph at the time of the property damage. 55mph is the least speed at which a homeowner can be compensated in case of a storm damage. What this means is that if a claimant sites a storm damage and the insurance company determines that the winds that destroyed his or her property were less than 55mph, he or she may not be compensated by the insurance company.
f) Claims Not Falling into the Right Category
Your insurance company may claim that your claim falls into the wrong category because of two reasons.
i) Wear and Tear
Many policies have a ‘wear and tear’ clause that states that gradual damage or wear and tear does not amount to a loss that qualifies for a claim settlement. All material things are subject to wear and tear, and we cannot expect that they will remain in the same condition they were in while they were in mint condition. As such, claiming for a settlement for something that has reduced in quality due to old age does not amount to a sufficient reason for compensation by an insurance company.
ii) Business Use
One of the most common reasons why insurance firms fail to compensate policyholders is ‘business use.’ If a claimant had taken a home insurance policy and used his or her premises for business purposes and in the process, suffered a loss, the insurance company will not be able to compensate the policyholder.
g) Unpaid Premiums
If you have unpaid premiums on your policy, you cannot make successful claims in case you suffer a loss leading to property damage.
h) Own Damage and Fraudulent Claims
Deliberately damaging your property and making fraudulent claims will be discovered after investigations and you will not be compensated for your loss.
i) Overshooting Your Limits
It’s pretty obvious that if you overstate your claim, your insurance company will not compensate you. If they do, they will not pay the excess amount overstated.
5 Tips for Making Successful Insurance Claims
1. Be keen When Purchasing a Cover
Potential policyholders should be thorough and accurate when applying for a policy. They should read the policy line by line and ask for clarifications where they do not understand the policy wording. Policyholders should also contact their insurer in case they spot any errors in their documents.
2. Stick to the claims procedure
If you need to file a claim, get in touch with your insurance company as soon as possible for general guidelines and advice. Follow their instructions and if what they tell you to do seems impractical, report the difficulties to them.
3. Always update your Insurer
Always update your insurance company about any changes in the circumstances surrounding your property or insurance policy-declare your modifications. If there are changes that affect the accuracy of the information you provided to them, for instance, residential address, update them as soon as possible.
4. Your Insurer does not have the final say
If an insurance company rejects your claim, all hope is not lost. You do not have to come to terms with their decision. Write a complain letter and let them understand your sentiments. Also, make it clear that you expect them to resolve the issue. Let them know that you are willing to take the issue up with the FOS if they do not deal with it to your satisfaction.
5. Always Challenge your Insurer’s Decision
If you do not understand why your insurance firm denied your claim, ask them to clarify the details that made them not honor the claim. If they site non-disclosure issues, re-check your policy. Your insurance company has to be clear about the decisions they make.
Consult With a Public Adjuster
While some of the reasons insurance companies give for not settling a claim are genuine, most reasons they give are lame and such reasons can always be appealed through the help of a competent public adjuster. Reasons such as making fraudulent claims or voluntary damage to your property are illegal and do not qualify policyholders to be compensated. However, there is a glimmer of hope for most claimants with genuine reasons.
Public adjusters are best suited to help claimants get their rightful compensation because they have the knowledge and experience of dealing with insurance firms. Staff adjusters can be compared to the devil on the insurance firm’s shoulders, and public adjusters know how best to deal and negotiate with them come hell or high water. 1st Response Public Adjusters will fight tooth and nail to ensure their clients get the justice they deserve. Furthermore, their chances of failing are next to none since they closely work lawyers who demand nothing but perfection and justice. A fair settlement is your legal right. Do not settle for less.