Why you shouldn’t give up when your homeowners insurance company denies your claim: Internet ScamBusters #143
The #1 Publication on Internet Fraud
By Audri and Jim Lanford
Copyright © Audri and Jim Lanford
All rights reserved.
Today we focus on a common consumer complaint that is especially relevant, given
all of the destruction from Hurricane Katrina: what to do when your homeowners
insurance company denies your claim.
We’ve been planning to deal with this topic for a while. And with millions of
homes damaged or destroyed by Hurricane Katrina, many people are going to be negotiating
with their homeowners insurance companies to get their homes repaired or rebuilt
in the not-too-distant future.
Plus, these tips are also useful when other types of insurance claims are denied.
Before we get going, if you haven’t yet seen our article on Hurricane Katrina
scams, we suggest you check it out. Many different types of Hurricane
Katrina scams are already making the rounds — find out what they
are, how to protect yourself, and how you can help. Visit now.
OK, let’s begin…
9 Tips for Winning When Your Homeowners Insurance Company Denies Your Claim
If you’ve made a claim on your homeowners insurance — and it’s been denied –
don’t give up. There ARE some things you can do to keep the claim active and try
to reverse the decision.
This will most likely be especially true for the next year or two as insurance
adjusters and company representatives are especially busy.
Here are 9 useful tips for winning your homeowners insurance claim:
Tip 1 — Don’t assume NO is final
Did you know that less than 1% of claimants query the decision when a claim is
denied? Yet, over 50% of those who do fight back get results.
So, you’ve got a good chance of winning if you fight back.
10% of claims are unjustly denied, so if you are aware your claim is legitimate,
and you’ve not indulged in any creative claiming, you have a good chance — even
if they’ve said no.
It’s also a fact that most claimants who query their claim end up with a better
settlement… or having a denial reversed!
Tip 2 — Get It In Writing
Insist on a review of the case, and a written comprehensive explanation of the
reasons for rejecting the claim. It’s surprising how many insurers don’t give
their "no" in writing, and it may be a legal requirement where you live.
Tip 3 — Now Check Your Policy
Once you have it in writing, check the reason for denial against your policy.
Look for ANYTHING that doesn’t add up or make sense. Then query this in writing,
referring to quotes from the policy where necessary.
Many claims come down to interpretation of the policy, so a good case explaining
why you believe your claim is valid may lead to reconsideration.
Tip 4 — Never Accept Claims Process Errors
The insurer will have a claims process or filing process. For example, you need
to file the claim within a certain window of time. The insurance company may deny
your claim (or try to) just because you filled in a form incorrectly, or didn’t
file within the designated time limit.
An insurance company cannot usually refuse to pay a claim that is otherwise valid
just because of a claim filing error in most legal jurisdictions, unless it can
show that your error either harmed the company, or prevented it from investigating
(BTW, each country and state has its own regulations about claims and responding
to them, so do check your own location’s rules and regulations before implementing
the ideas on this list.)
Tip 5 — Try Asking Your Agent For Assistance/Advice
This isn’t frankly very likely to do any good, but you never know until you try.
They may be able to help, or to direct you to the right people to contact for
the following tips…
Tip 6 — Call The Authorities
In the US, call the State Insurance Department or the Department of Insurance.
In the UK, the Insurance Ombudsman. Wherever you are, check first with the legal
authority that governs insurance about what your rights are.
Tip 7 – Secure An Agent
Actors and writers use agents to represent them in the marketplace. Insurance
companies also use agents so they don’t have to deal with you personally.
Consider hiring an agent to represent you in the claim. Good agents will pay for
themselves in major claims.
Many people aren’t aware that these agents exist. For example, in the US they
may be called "Professional Loss Consultants" and charge a fee of about
10-15% of your claim. They know how to deal with insurers and claims, and may
increase your claim for you if they are brought in early enough (which may cover
their fees). If you’ve already made a claim and lost, they may still be able to
But beware of "no win no fee" arrangements: before signing, attractive
though they may sound, check what the fee WILL be if you win — and who will pay.
Otherwise you may find your winning claim is eaten away by the agent’s legal costs.
Tip 8 — Consider A Lawyer
Now this tip is a two-edged sword. Insurance companies tend to sit up and take
notice when lawyers are brought in. On the other hand, once a lawyer or attorney
is hired, you may find that the insurance company and your own agent (if you have
one) will only be able to communicate through the lawyer, which can be costly
Tip 9 — Be Persistent
Telephone the company regularly — every 2-3 weeks. Be polite, but be persistent.
Keep asking for the person’s supervisor or manager if you don’t get a suitable
Log all phone calls, with the date, time and names of the people you spoke with.
Follow each call up with a letter explaining the conversation and the issue you
have with it, and ask for a written response within 14 days. Then call again if/when
you don’t get a response.
It goes without saying to also keep copies of all letters you send, and send everything
by certified mail with return receipt.
We obviously can’t guarantee that these tips will get your claim paid out, but
they certainly can help.
And remember, less than 1% of people query a rejected claim, yet over 50% of those
who do get somewhere!
We hope these homeowners insurance tips were useful — we’ll see you next week.