Having your property impacted by a fire can be devastating, both emotionally and financially. While an insurance claim to cover the finances of repairing and replacing your damages is ideal, there are many reasons why your fire damage claim could be denied or reduced. Here are the most common reasons that insurance companies deny fire damage claims, and how to get help if your claim has been denied.
Lack of proof or documentation
When is the last time you took inventory of everything on your property, and what it is all valued at? It’s easy to forget to keep records up to date, but imperative when filing insurance claims. If you want to claim that there was a loss of $5k worth of technology, for example, you will need to have proof or documentation of owning these items and their value. Once these are a loss insurance will need the proof, and if you don’t have documentation, they can either deny these claims, or offer compensation at an estimated value that could be reduced from their actual value, and leave you with a settlement that doesn’t cover the cost of replacement.
Preventative measures not taken
Your insurance company will expect you to have taken reasonable preventative measures to prevent fire damage. If there are any ways to safely limit the fire damage, insurance will expect you to have done this. For example, if your property is not up to date with your state’s fire code, your insurance company may deny your fire damage claim. Making sure that your business is well maintained and not exposed to any fire hazards can go a long way in making your fire damage insurance claim process easier.
Insufficient coverage
According to Insurance Journal, 75 percent of American businesses are underinsured. It’s extremely important to take the time to review your insurance policy and ensure you are properly insured before any claims are needed. Some policies will only cover fire damage, but not damages incurred during the fire event, like smoke damage, or water damage from a sprinkler system. Not having the full coverage can be financially devastating.
Misrepresentation
It’s important to be honest when reporting your fire damage claims. Sometimes people will lie about the cause of the fire in order to prevent embarrassment, or because they think the truth will look worse to the insurance company. This can be as innocent as not wanting to admit that a child knocked something over to cause the fire. While it’s an understandable instinct to want to misrepresent what happened, and can seem like a harmless white lie, your insurance company will investigate the claim, and you don’t want to be denied because they have accused you of misrepresenting the event.
Suspected arson or insurance fraud
Another common reason that insurance will deny your claim, is suspected fraud or arson. Insurance cannot deny your claim based on speculation alone, but they may use the following language for denials due to suspected fraud:
- The fire department was unable to determine the source of the fire
- The insurer believes you or someone else committed arson to defraud the insurer
- You are lying or hiding details about some aspect of your insurance claim
How to get help
If your fire damage claim has been denied, or you have received a proposed reduced settlement from insurance, you can still fight back. Here are a few ways that you can move forward towards a satisfactory agreement with your insurance company:
Review your insurance policy
While it’s best to review your coverage before a loss occurs, it can still be beneficial to review your policy after a denied or reduced claim as well. Sometimes you may find that your established insurance coverage should be covering more than what insurance has proposed, and you can push back for an updated claim.
Ask for written justification of your claim denial
You should receive written justification from your insurance company for your claim denial. This is important to review and understand, and to have on hand for future negotiations.
Hire a public adjuster
A public adjuster is a licensed professional who represents you in the insurance claims process. A fire damage public adjuster will have years of expertise with insurance policies and know exactly what your policy should cover, to ensure you end up with the best possible settlement.
D.A. Lamont Public Adjusters
You have enough on your plate without the stress of becoming an insurance expert yourself. D.A. Lamont Public Adjusters are passionate about claim management and getting our clients their rightful compensation. We support our clients through every step of the claims process, bringing you peace of mind. If you have suffered fire damage, or any other kind of property loss, contact us today.