​What Do I Do If the Insurance Company Denies My Property Damage Claim?

September 30, 2022
​What Do I Do If the Insurance Company Denies My Property Damage Claim? After an unexpected disaster damages your vehicle, home, or business, you never expect your homeowner's or another policy insurer to fully or partially deny your claim. Property owners rely on their insurance policies to cover property damage caused by covered events, such as car accidents, residential flooding, home invasion, and other disasters. When an insurance company refuses to provide the benefits you pay for in premiums, you have the right to understand what's going on and take action against unfair, misguided, or bad faith insurance practices. If you believe your insurance carrier has improperly denied your claim or failed to handle a claim in good faith, do not despair. In many cases, all it takes is the help of a skilled attorney to identify claim issues, show the provider you will not back down, and then demand the money owed to you under your policy. A dedicated property damage lawyer will have extensive experience standing up for individuals and small business owners and know how to handle big insurance companies. Continue reading to learn more about what you can do and how a lawyer could help after a property damage insurance claim denial.

Common Reasons for Property Damage Insurance Claim Denials

There are a variety of reasons why insurance providers deny property damage claims. Let's look at some of the top factors that contribute to claim denials:
  • Timing. Most insurance policies require policyholders to report covered events promptly. Not all policies include specific time limits, but some do. You could lose your right to claim benefits if you fail to notify your provider within a specified or reasonable time after a property damage event.
  • Non-payment. Always pay your insurance premiums consistently and in full, even during an active claim. If you have been missing premium payments or owe your provider any outstanding balances, they may have grounds to deny benefits while you remain in the red.
  • Inconsistencies. Adjusters often deny claims when their investigations reveal inconsistent or questionable evidence. Irregularities may be due to genuine outliers or honest mistakes, but you can rest assured that adjusters will look into them and may minimize or deny claims based on what they find.
  • Evidence. Supporting evidence, or lack thereof, can make or break an insurance claim. As a claimant, you are responsible for proving that your insurer owes payment for a covered event. If you did not include sufficient documentation when you filed your claim and cannot produce such evidence upon request, the insurance company might issue a full or partial denial.
  • Exclusions. Every insurance policy has specific exclusions, though not every policy has language that makes these exclusions clear. If the policy under which you file your claim has provisions excluding your particular type of property damage, you can expect the insurance company to deny the claim.
  • Inaction. Take reasonable steps to prevent further damage to your property after a covered event. For instance, if a car accident damages your rear axle, do not continue driving and ruin your alignment. If you fail to minimize your losses proactively, your provider may have grounds for denial.
  • Bad faith. In some cases, policyholders do everything correctly and still receive maddening denials for valid insurance claims. This is because some insurance companies engage in “bad faith” practices, leaving claimants high and dry in the name of corporate profitability. If you suspect your provider is acting in bad faith, an attorney can help determine whether you have grounds for a lawsuit.
Many property damage claims are time-consuming and complex, so tackling them alone can be challenging. A professional property damage insurance lawyer can help you prepare and handle every aspect of your claim, gather valuable supporting evidence, and negotiate tirelessly to maximize your settlement.

Steps to Take If Your Insurer Denies Your Property Damage Insurance Claim

When an event damages your property, a denial does not always mean the end of the line for your property damage claim. Following a claim denial, you could take the following steps to understand what happened and pursue the compensation owed to you:
  • Determine the reason for the denial. Your first step should be to identify why the insurance company refused to pay your claim. When insurance providers issue denials, they must notify claimants of their decisions in writing and indicate the specific policy language that supports the exclusion or other grounds for refusal. Some denials are justifiable, while others are not. It is essential to understand why the insurer denied your claim, so you know exactly how to address your provider's concerns if and when you push back.
  • Prepare to appeal the denial decision. If you attempt to discuss a misguided denial with your claims adjuster and the conversation goes nowhere, your next step will be to file a formal appeal. In the letter explaining the reason for your denial, your insurance company should have included information on how to appeal its determination. There is typically only a short window to do this, and it begins closing as soon as you receive your denial letter. You want to act quickly, but don't forget to be thorough. If the insurer initially denies your claim due to a lack of evidence, you would want to include plenty of supporting documentation along with your appeal. The more organized and well-supported your appeal, the better your chances of the insurance company seriously reconsidering its denial.
  • Work with a public insurance adjuster. If you are still struggling to get through to the insurance company or suspect they may be acting in bad faith, contact a licensed public insurance adjuster. These independent adjusters can provide professional, third-party advice regarding your coverage limits, the value of your losses, and insurance regulations in your area. When appropriate, a public adjuster may also recommend and help you in filing a formal regulatory complaint with your state's insurance commissioner.
  • Contact a property damage lawyer. There's no need to go up against a big insurance corporation on your own. If you have received frustrating claim denials, working with an aggressive property damage lawyer is the best way to level the playing field and demand what your policy entitles you to. When the insurance company receives a formal letter from an attorney communicating on your behalf, they'll know not to play games.

Act Quickly When You Suspect a Provider Is Acting in Bad Faith

If you know or suspect that the insurance company's denial was not a misunderstanding, discrepancy, or other reasonable grounds, you may be the victim of bad faith insurance practices. Learning that your provider is not acting in good faith can be distressing and discouraging but take heart because you have options. When your insurance company is acting in bad faith, one of the first and most important things you can do is to get everything in writing. Submit a request, in writing, for a statement and explanation of the provider's decision to deny your claim. Do not accept verbal explanations that are in no way binding or recorded. Demand a written response via email or letter. Once you force the insurer to reduce its justification into words, you and the company will both they cannot backtrack on it. If the insurance company still refuses to budge, your next step will be to begin preparing a bad faith insurance claim. An experienced property damage lawyer will recognize bad faith insurance practices and protect you from them. The most important thing to prepare is evidence of the validity of your original property damage claim and the insurance provider's deliberate bad faith actions concerning that claim. You can gather evidence like your communication records with the insurance adjuster, relevant policy agreements, and documentation of additional losses you incurred due to bad faith practices. Your attorney may even be able to help you obtain internal documentation from the provider as proof of how they managed your claim. Once you and your attorney have completed preparations, you can initiate a bad faith insurance claim against the provider. You must submit a written notice of the claim to the insurance company and your state's Department of Financial Services. Your notice should include information about any obligations the insurer failed to uphold, the names of all parties involved, the specifics of known or suspected bad faith insurance practices, and any statutory laws the provider violated. After you have issued the appropriate notifications, you can file your bad faith lawsuit in civil court. Insurance lawsuits must adhere to strict and complex regulations, so it's best to allow your attorney to prepare the filing paperwork and observe any relevant legal requirements. Once your lawyer files a lawsuit, you and the other side must participate in a process known as discovery. Discovery is a procedure in which both sides have the opportunity to request evidence and information from the other to prepare and support their respective positions. In many cases, settlement negotiations continue behind the scenes before, during, and after the discovery process. Most insurance claims end in out-of-court settlements, and it's possible to settle a case at any time before the court reaches a verdict. If your case has not settled once the discovery has concluded, it will proceed to trial.
Personal Injury Lawyer
Matt Dolman, Property Damage Attorney
Depending on the circumstances, a judge or jury will hear your case at trial and use the evidence and arguments presented by each side to render a verdict. Once it has reached a verdict, the court's decision is binding for both parties, though either side has the right to appeal the decision if they disagree. Standing up to an insurance provider acting in bad faith is challenging and intimidating but finding the right attorney for your case doesn't need to be. Demanding the money you deserve after an unexpected property damage event can feel overwhelming, especially when you feel like you've already done everything you can. But you do not accept an undervalued or rejected claim, nor do you need to stand up to the insurance company alone. If you have questions about your legal options after an insurance claim denial, be sure to contact an experienced property damage lawyer to discuss your rights and legal options.

Matthew Dolman

Clearwater Personal Injury and Insurance Attorney

This article was written and reviewed by Matthew Dolman. Matt has been a practicing civil trial, personal injury, products liability, and mass tort lawyer since 2004. He has represented over 11,000 injury victims and has served as lead counsel in over 1000 lawsuits. Matt is a lifetime member of the Million Dollar Advocates Forum and Multi-Million Dollar Advocates Forum for resolving individual cases in excess or $1 million and $2 million, respectively. He has also been selected by his colleagues as a Florida Superlawyer and as a member of Florida’s Legal Elite on multiple occasions. Further, Matt has been quoted in the media numerous times and is a sought-after speaker on a variety of legal issues and topics.

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