6 Reasons Your Home Insurer Could Deny a Claim

Cody Kukay
by Cody Kukay September 27, 2016 / No Comments

Heirlooms stolen? Basement flooded? Roof knocked off in a windstorm? No worries, you think, you’re insured. And then the letter comes: “We regret to inform you…” How did that happen?

Here are six possible reasons your home insurance claim can be denied:

1. You lied about your home

Did you tell your insurer your electrical work is up to date when the knob-and-tube wiring hasn’t been upgraded since the 1950s? Shaved a couple years off your furnace’s age when you filled out the insurance application? Said your new home alarm system is all set up when you still haven’t called the security company? If you fib at all to your insurance provider, it could deny your claim.

Even if you’re completely honest when you apply for coverage, you’re still responsible for telling your insurance provider if your level of risk changes. That could involve setting up a home daycare, taking on short-term rental guests, buying a trampoline or renovating the basement. Again, if you don’t ’fess up, coverage could be denied.

2. You lied about the loss

Did you get mad, punch your new flat screen and tell your insurer that a burglar stole it? Did you twist the truth about how that kitchen fire started? Once insurance adjustors figure out what really happened, they’re not likely to cut you a cheque. That’s fraud, after all.

3. You were never covered for that type of damage

Sometimes, even if you buy an all-risk home insurance policy, claims won’t be covered. And that’s even when they really did happen. Common exclusions include damage from flooding, volcanoes, insects and rodents, and illegal activity. You can buy additional coverage (called endorsements) to protect yourself from some of those exclusions, like overland flooding. But other risks are straight up uninsurable. So if your beach house is flooded by seawater, don’t bother submitting a claim.

4. You were under your deductible or over your cap

When the broken window costs $500 to fix (darn those neighbourhood baseball games!) but your deductible is $1,000, your policy won’t kick in. Or maybe your great-great-aunt’s engagement ring was swiped during a break-and-enter. It was last valued at $15,000, and your policy has a $6,000 cap on a single piece of jewelry. If you didn’t buy a jewelry endorsement, you’re on the hook for that last $9,000.

5. You forgot to pay your bills

You thought you switched all your bills to online banking, but it turns out you forgot your insurance provider. If you miss one payment, it’ll likely give you a break. But if you get too far behind on paying your premiums, your insurer can deny your claims.

6. You were lazy

Home insurance isn’t supposed to replace general home upkeep duties. If a hurricane knocks off your roof and the adjuster finds a termite infestation, the insurance company could deny your claim. The insurer could argue that your negligence weakened your house’s structure, which made it susceptible to the howling winds.

To estimate your insurance costs, get a home insurance quote.

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Flickr: DiAnn L’Roy