This is one of the most frustrating situations that a person or business can feel. You purchase insurance with the expectation that it is going to be there when you need it. So why did your claim get denied?
There are several reasons why an insurance claim will be denied. We will run through them here.
Wear and Tear
Things that we know are going to happen, can’t be covered by insurance. For example, we know for sure that the tires on our car will eventually wear out and need to be replaced. These kinds of things aren’t covered because that would literally just be giving the insurance company our money and getting less of it back when the tires wear out. No sane person would engage in that kind of transaction.
If we did that there would be no insurance. There has to be a chance that whatever you’re paying to have covered won’t actually happen. So things that are damaged and need to be replaced as a result of wear and tear typically are not covered. This includes things like tires that have worn down, spark plugs, roofs, oil changes, faded paint, aged siding etc.
One of the first things that an insurance adjuster will do is try to determine “What Happened”. If it just wore out, the claim will most likely be denied.
If we pass that first test in that our claim was an unanticipated event, then we can move onto the next criteria. This one is less common but does happen. Did the event take place during the time that the policy was in effect? Sometimes if we switch insurance carriers and then later try to put in a claim for an event that happened during the previous company's policy period, the current company will deny the claim. In other words company B will only cover events that happen during their policy period, and not cover anything that happened while you’re with company A. The solution there is simply to file your claim with the correct company for the time of the event, whether you still insure with them or not. Boo
Often if the property or address is not listed on the policy, there will not be coverage. Make sure that the Vehicle, House, Building, and Equipment, is listed on the policy and has some way to identify it. Year, Make Model, VIN/Serial Number, Address, etc. Always look over your policy when you get your own copy. Paying attention to detail could save you lots of money.
This is where most of the heartburn with claims comes from. Policies do not cover every conceivable thing. Every one of them will have some events that are excluded. A very common example of this is a slow water leak. Most insurance companies will cover a burst pipe, but some policies put an exclusion or exception that if the leak has been going on for longer than a specific amount of time, they will not cover it.
If you don’t know what to look for it can be frustrating when it’s time to file a claim to find you weren’t covered the way you thought you were. Just remember that not all insurance policies are created equal. Some have broader coverage and are less restrictive. These usually cost more. Some are super cheap but they don’t always cover what you need them to. Consulting with an experienced agent is a great way to find out the best coverage for you and your needs.