Ways Insurance Companies Deny Claims
Water damage is a common and costly issue for homeowners. Whether it’s caused by a broken pipe, a natural disaster, or another event, the damage can be significant and the repair costs can be high. Unfortunately, dealing with an insurance company after a water damage claim can be a tricky and frustrating process. Below we’ll explore some of the top ways that insurance companies can take advantage of policyholders after a water damage claim, and what you can do to protect yourself.
Here are the top 16 ways
- Delaying the Claim Process: Insurance companies may use delays as a tactic to wear down policyholders and reduce their chances of getting a fair settlement. This can be incredibly frustrating for homeowners who are already dealing with the stress of repairs and cleanup.
- Denying Coverage for Certain Types of Damage: Some insurance policies may exclude certain types of damage from coverage, such as mold or mildew damage. It’s important for policyholders to read and understand their policies to know what is and isn’t covered.
- Undervaluing the Cost of Repairs: Insurance companies may use a low estimate of the cost of repairs to limit their payout. This can leave policyholders with a settlement that doesn’t cover the full cost of repairs.
- Using “Standard” or “Replacement” Language to Limit Coverage: Policyholders should be aware of the language used in their policies, as some policies may use language that limits coverage to standard or replacement costs. This can mean that policyholders are not fully compensated for the cost of repairs.
- Alleging That the Damage Was Pre-Existing: Insurance companies may try to deny coverage by claiming that the damage was pre-existing, even if the policyholder had no knowledge of it.
- Refusing to Pay for Additional Living Expenses: Some policies may not cover the cost of additional living expenses, such as hotel stays, while repairs are being made.
- Requiring the Insured to Use a Specific Contractor or Vendor: Some insurance companies may try to limit policyholders’ options by requiring them to use a specific contractor or vendor for repairs.
- Demanding Unreasonable Documentation or Proof of Loss: Policyholders should be prepared to provide documentation of the damage and proof of loss, but some insurance companies may demand more than is reasonable.
- Using “Bad Faith” Tactics to Delay or Deny Payment: Some insurance companies may use unfair or dishonest tactics to delay or deny payment on a claim.
- Offering a Low Settlement or Lump Sum Payment: Insurance companies may try to settle a claim quickly by offering a low settlement or lump sum payment.
- Refusing to Pay for Mold or Mildew Damage: Some policies may not cover the cost of mold or mildew damage, which can be a significant issue after water damage.
- Denying Coverage Due to Lack of Maintenance or Upkeep: Insurance companies may try to deny coverage by alleging that the damage was caused by lack of maintenance or upkeep.
- Refusing to Pay for Damage Caused by Natural Wear and Tear: Some policies may not cover the cost of damage caused by natural wear and tear.
- Alleging That the Damage Was Caused by Criminal Activity: Insurance companies may try to deny coverage by alleging that the damage was caused by criminal activity.
- Denying Coverage for Damage Caused by Flooding: Some policies may not cover the cost of damage caused by flooding.
- Refusing to Pay for Damage Caused by Sewer Backups: Some policies may not cover the cost of damage