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In What Circumstance Would a Property Insurance Claim Be Rejected?

in what circumstance would a property insurance claim be rejected

 In What Circumstance Would a Property Insurance Claim Be Rejected? – Property destruction usually has a major financial impact. As a result, property owners acquire insurance to protect their interests. It covers either liability or property damage, or both. When you invest in property insurance, the last thing you want to worry about is a claim denial if something goes wrong.

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Today, we’ll look at the situations in which an insurance company may deny a property insurance claim. Hopefully, by the time you’ve finished reading this really useful essay, you’ll be aware of the traps to avoid.

So, your question is, In What Circumstance Would a Property Insurance Claim Be Rejected? Before we go ahead and discuss this, there is a very vital thing you need to know first- your insurance policy.

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Know Your Insurance Policy

Before going over the grounds for claim denial, it’s important to note that no two property insurance plans are same. As a result, what applies to your neighbour may not apply to you, and vice versa. So, don’t base your decisions on the experiences of others. Instead, grasp the terms and conditions of the insurance you’ve purchased right away.

You have every right to interrogate the insurance agent until you have a full understanding of the situation. You can hire a public adjuster to help you if you don’t want to go that route. Make your own notes if necessary.

Circumstance In Which a Property Insurance Claim Can Be Rejected

Now we delve into the question, In What Circumstance Would a Property Insurance Claim Be Rejected?

1. The Loss Isn’t Covered By The Policy

Property insurance policies are customized to meet the needs of the policyholder. Let’s say you get property damage insurance but not liability coverage; in such scenario, the insurance company will not fulfil any liability claims that arise. Let’s look at another scenario. If you do not purchase flood insurance or damage from an earthquake, the insurer will deny your claim.

In the same way, every policy has some exceptions. It will not be accepted if your property is damaged as a result of any of the so-called exclusions. As a result, as previously said, you should know your insurance policy’s terms and conditions like the back of your hand. Only losses that are covered by the insurance policy are honored. Anything from the outside will be flatly refused.

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2. Unfulfilled Policy Conditions

The insured must meet certain requirements. If you don’t follow them, your claim will be rejected. Security locks on all outside doors, the requirement of one or more fire extinguishers depending on the size of the property, and so on are examples of such restrictions. These terms are spelled out in the policy paper.

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3. Delay In Filing Claim

In the event of a property loss or damage, the insurance company must be notified within a certain deadline, and the claim papers must be filled out and submitted appropriately. The claim will be refused if you do not fulfil this deadline. However, rest assured that the deadlines are reasonable and achievable. Your policy document contains this information. Your insurance company is only a phone call away if you can’t find it.

4. Missed Premium(s)

The insurance company has no legal obligation to honour your claim if you fail to pay one or more premiums on your policy. You are solely responsible for the damage because you violated the contract’s conditions by skipping the problem.

5. Withholding Pertinent Information

Claims stemming from the negligence of property owners or tenants are not covered. These are also the situations in which the insured tries to conceal information that could lead to the truth. As a result, any claim in which the insured easily withholds crucial facts or information will be rejected.

6. Damage Is Not Documented Correctly

The property owner must prove loss before filing a claim. As a result, meticulous documentation is required. You must include even minor data such as the date and approximate time of loss, attach photos and videos of the damage, describe the condition of the assets previous to the harm, and so on. You can only be sure that the insurance provider will fulfil its end of the bargain if you have complete proof of a covered loss.

7. Preventive Steps Not Taken To Contain Further Damage

Once the first damage has occurred, it is the responsibility of the property owner or tenant to ensure that the harm does not spread further. Some of us do it meticulously, taking copious notes and photos of our efforts, while others leave it to chance. If you do not implement the preventive measures, the insurance company is not obligated to compensate the secondary loss.

8. The Insurer Suspects Fraud

The insurance company investigates the loss independently. Your claim will be denied if it detects fraud and finds evidence of it. It is important not to utilise any underhanded tactics because they meticulously investigate every claim with a large monetary value. Many times, people have attempted to pass off intentional property destruction as an accident. They then construct a bogus case to prove their loss. The insurance does not look favourably on these dishonest practices.

What to Do If Your Claim is Rejected

Now, you’ve been able to understand from the article In What Circumstance Would a Property Insurance Claim Be Rejected? What if you feel it shouldn’t have been rejected? How do you proceed?

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1. Check your Policy Documents

Examine the specifics of your policy to evaluate if the facts support the rejection reason.

If you believe it was denied unfairly, you should appeal. This is because these decisions can occasionally be overturned (typically after a complaint is filed with the Financial Ombudsman Service – see below for additional information):

  • Check that you provided all of the necessary information at the outset.
  • You’ll need to write down or highlight the specific wording in your policy that specifies you’re protected later.
  • Make a note of any confusing or poorly explained language. Your insurance company has a legal obligation to provide you with clear information and a legitimate explanation for declining to pay your claim.
  • According to new laws, an insurance company cannot deny your claim if you answered all of their questions honestly and to the best of your knowledge. If your insurer didn’t ask for information but now says you should have, make a note of that as well.
  • Did the insurer request the information that it now claims you should have provided voluntarily? Make a note of it if it didn’t.
  • Then look for any other documents that pertain to your coverage.

Try to locate a copy of a letter you wrote your insurance provider informing them of a change in your circumstances (this is your obligation).

2. Contact the Insurance Company

It’s time to contact the insurance company after you’ve looked over your coverage.

You can call the company and speak with their complaints handlers, or you can compose a formal letter of complaint and mail it to the company’s complaints procedure’s contact.

Your complaint should then be reviewed internally by the insurer. If you want more information, you can ask for it.

If you purchased your coverage through an insurance broker, they may be able to handle your complaint for you; it’s worth asking to avoid the inconvenience.

3. How to write a formal complaint letter

Here are some helpful hints for writing your complaint letter:

  • On the letter, write the date.
  • Give your name as well as your policy number.
  • Make a big ‘complaint’ mark at the top of the letter.
  • Include any proof you have to back up your claim.
  • Describe what you want the company to do to make things right.
  • Explain your grievance in detail, including why you believe your claim should not have been denied.
  • If you are dissatisfied with the company’s reaction, say so. You’re going to file a complaint with the Financial Ombudsman Service.

4. Get an Independent Assessment

If the issue is technical or specialized, an independent assessment may be beneficial. For example, if your insurer claims that damage to your property was caused by normal wear and tear but you claim that it was caused by an accident.

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A loss assessor (not to be confused with a loss adjuster, who works for the insurance company) should inspect the damage and submit a report to the insurance company as proof.

However, they will charge you a fee to represent you.

Even if it does not persuade the insurance company to change its opinion, it may be useful knowledge to have in the future.

5. Go to the Financial Ombudsman Service

You have the right to submit your complaint to the Financial Ombudsman Service if you’re still unhappy after going through the insurance company’s complaints process.

The Financial Ombudsman Service is a non-profit organization that analyses consumer complaints concerning financial institutions.

If you file a complaint with them, they’ll look at both sides of the story, examine the evidence, and try to come up with a fair solution based on the facts and common sense.

You can only file a complaint once you’ve gotten a ‘final response’ from your insurance provider, or if eight weeks have gone since you last heard from them.

If the Financial Ombudsman Service determines that your claim was wrongfully denied, they have the authority to order the insurance company to:

●     explain its actions

●     apologize, and

●     pay compensation or take appropriate steps to review its actions.

Do I need an Expert’ to Help With My Complaint?

No, you shouldn’t require any particular assistance or support.

The Financial Ombudsman Service is a no-cost, no-obligation service that prefers to hear from you in your own words.

Everyone has the right to delegate authority to someone else.

Some people prefer to have someone from Citizens Advice or a family member or friend assist them with their complaint.

However, if you opt to hire someone to argue your case for you – such as a claims management business – you may be responsible for their charges.

This could imply that you pay them a portion of any remuneration you receive.

Summary

You’ve now learnt In What Circumstance Would a Property Insurance Claim Be Rejected?Intentional losses are not covered by property insurance. It only applies to incidents that are unintentional. The insured must also follow all insurance conditions, such as putting in place preventive measures and paying premiums on time. Aside from that, be aware of the types of losses covered by your insurance policy ahead of time. If and when a loss occurs, notify the insurance provider as soon as possible and strive to complete all of their requirements accurately and on time.

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