How to Challenge Your Homeowner's Insurance
Before the Claim
- 1). Read and understand your homeowners insurance policy before you buy. The better you know how your policy works, the easier it will be for you to file a claim when you suffer a loss.
- 2). Pay close attention to the "exclusions" section of the policy so you understand what it won't pay for. All policies have some exclusions, with damage due to negligence or flood being two common examples. If you fear a loss from an excluded cause, ask about paying extra for extended coverage. Flood insurance, for example, is sold separately. Note the maximum coverage for specific categories of items, including jewelry and electronics.
- 3). Understand how your insurance policy establishes the value of your home and possessions. In some cases, the replacement cost for an item might exceed its actual cash value. You can buy policies that match the best replacement rate, or spend less money and risk taking a hit when replacing valuables.
- 4). Catalog your valuables on yearly or bi-yearly basis. Most homeowners policies will have a lump sum payment for general household goods, but you should have proof for any possessions worth more than a few hundred dollars.
Filing a Claim
- 1). Catalog, in writing, the kind of damage or loss you have suffered and take photos or video, if possible. Cellphones, especially smartphones, can be ideal for this purpose.
- 2). Contact your insurance company's claims department as soon as possible after your loss. Follow the claims process precisely, including filling out and sending in any necessary forms.
- 3). Remember throughout the claims process that your claims agent is not necessarily your friend. Part of his job is to be on the lookout for reasons to deny your claim. The process doesn't have to be adversarial, but you should be careful about what you say to company representatives.
- 1). Contact your claims adjuster for a written explanation of why the claim was denied. Ask which specific sections of your policy contract justify the denial.
- 2). Compare the denial to your copy of the policy contract. If it's a legitimate denial, you may be better served cutting your losses and moving on. If you think you have a case, go through your company's appeals process. Each company has one, and they are often scrupulous to be fair.
- 3). Call a lawyer if the denial is upheld. Many lawyers who specialize in insurance claims offer free analysis and consultation, and then work for a percentage of the final settlement. You don't have to sue the insurance company, but the lawyer's advice can help you assess whether or not it's worth a try, and what strategy you should use.
- 4). Contact your claims representative and suggest that you may sue if your claim isn't honored. Specify the points in your contract that support your belief that the claim is legitimate. This step may require many phone calls and several weeks. Document who you speak to and when, as well as any information that is provided.
- 5). Sue the company as a last resort, and only if you feel you have a good chance of winning the claim. Lawsuits are long and often more expensive than the initial loss.