Did you recently suffer property damage from a fire? Was your home ravaged by a blaze and currently in ruins? You’re not alone. According to the U.S. National Fire Incident Reporting System, residential use is the leading property classification involved in fire deaths (70.9%), fire injuries (74.1%) and fire dollar loss (47.3%).
In fact, the National Fire Protection Association (NFPA) reported that, on average, a fire department responded to a fire somewhere in the U.S. every 21 seconds in 2022. A home structure fire was reported every 88 seconds, a home fire death occurred every three hours and fourteen minutes, and a home fire injury occurred every 53 minutes.
So, if you’re one of the unfortunate ones who experienced this kind of loss, what do you do when your insurance company extinguishes your hope for proper compensation?
In this article, we’ll break down the common reasons why insurance companies deny fire claims and list down the things that you can do about it as a policyholder so that you can rebuild and rise resiliently from the ashes.
Understanding Fire Claims
In 2022, the NFPA said that local fire departments responded to an estimated 1.5 million fires in the United States. These fires caused almost 4,000 civilian fire deaths, and around 13,000 reported civilian fire injuries.
Meanwhile, the property damage caused by these fires was estimated at $18 billion. This is where your insurance provider should swoop in to offer a helping hand, but sometimes, they don’t.
What Is The Standard Coverage For Fire Insurance?
Fire insurance is a form of property insurance that covers damage and losses caused by fire. Most policies come with some form of fire protection, but homeowners may be able to purchase additional coverage in case their property is lost or damaged because of fire.
Purchasing additional fire coverage helps to cover the cost of replacement, repair, or reconstruction of property above the limit set by the property insurance policy. This type of insurance policy typically contains general exclusions such as war, nuclear risks, and similar perils. Damage caused by arson or a deliberate fire is generally not covered.
Common Reasons For Fire Claim Denials
Fire claim denials happen more often than you think. Public adjusters even refer to it as the type of insurance that has the “lowest success rate” after filing.
So, to help give you an understanding of your chances, here are some of the common reasons why insurance providers deny them:
Dishonesty Or Misrepresentation
Full transparency is crucial. Don’t hide behind the smoke.
As a policy owner, you have the obligation to be truthful in any representation that you make with your insurer. Honesty is the bedrock of any insurance claim, and so deliberate dishonesty or misrepresentation can hurt your chance.
Lack Of Proof
There’s no insurance company out there that doesn’t require an insured to fully substantiate their claim, no matter how many times they plead mercy and consideration.
It’s not about being ruthless or heartless – but being thorough and extraordinarily diligent. Their cutthroat process intends to protect the premiums of their policyholders because insurers simply can’t afford to pay out a baseless claim. That’s why proper documentation is key.
Non-Compliant Structural Works
Another reason why claims are denied is structural works that weren’t permitted or compliant under your respective building code or local regulations.
An insured company will not condone haphazard or unregulated construction since there’s a possibility that it has potentially increased the fire hazard, thereby violating the policy.
Non-Coverage Under The Policy
If the cause of the fire that damaged your property was excluded from your policy, then it will consequently result in the denial of your claim. Sometimes, specific circumstances may fall outside the coverage, so understanding the terms and limitations is essential to avoid disappointments.
Additionally, the policy may also only cover damages that directly result from flames rather than smoke or water from fire sprinklers.
Poor Preventive Measures
An insurer will not reward negligent conduct, and so it will investigate if you performed any act that might have increased the flammability or the likelihood of fire in your property.
You must ensure your electrical, preventive fire equipment, fire extinguishers, and sprinklers are in good working condition. You should also check if you’ve repaired past damages and addressed any natural wear and tear.
Poor Workmanship Or Design
Your insurance company will not hesitate to raise issues about the structural integrity or construction of your property. If the fire resulted from poor workmanship or architectural design flaws, they may argue negligence, potentially leading to claim denials.
Suspected Arson For Insurance Fraud
You must avoid doing any act that might lead your insurer to suspect that you’ve intentionally burned down your property to commit insurance fraud. That will result in an outright denial of your claim.
Thus, you must establish your innocence by cooperating with your insurance company’s investigators to dispel suspicions of insurance fraud. You should also be prepared to counter their arguments with credible evidence.
Your policy most likely only covers lawful activities within the premises of your property, and so illegal acts such as the manufacture, trade or sale of prohibited substances will be detrimental to your case.
This is especially crucial if the fire is linked to unlawful conduct on the property. Thus, maintaining a lawful environment is paramount to ensure your eligibility to file a claim.
One of the most common reasons why insurance companies deny claims is significant discrepancies in the valuation of losses.
Make sure that you don’t exaggerate or inflate the costs of repairs. Remember, clear communication will result in a favorable outcome.
Moreover, it would be incredibly helpful if you also file records of the building’s construction costs, repair and maintenance costs, and a detailed description of your property’s state before and after the fire.
Other Reasons Insurance Companies Deny Fire Claims
- The cost of damage is lower than your deductible;
- You didn’t file your claim within the prescribed period;
- You didn’t pay your premiums or make delayed payments;
- You underinsured your personal property;
- Your policy has expired, or it was canceled before the fire;
- Your property caught fire from nearby buildings (which may be an excluded risk).
Tips On How To File A Successful Fire Claim
Dealing with the aftermath of a fire is already devastating enough, and the last thing you’d want is for your insurance company to make you jump through hoops to reclaim your rightful compensation. Listed below are some tips on how you can efficiently file a fire claim:
Keep A Record Of Useful Information
Your insurer will definitely ask for the following details, so it’s better to have a record of them before you file your claim so your case can have a faster resolution:
- Date of loss
- Type of loss/damage
- Location of damage
- Any related injuries
- Others involved
- Condition of the home
- Description of damaged contents
- Any necessary temporary repairs
- A police or fire department report
- Photographs and videos
Prevent Further Damage
Apart from guaranteeing the safety of you and your loved ones, it’s important for the insurance company to see that you’re doing everything you can to prevent further damage to your property. So, when applicable, try to:
- Board up or build a fence to prevent looters from taking advantage of the tragedy;
- Cover the holes in the walls and roof to protect your property from the elements;
- Move at-risk and vulnerable property from the affected areas;
- Smolder all embers to prevent more fires.
Track Your Living Expenses
Your policy most likely has a clause that will reimburse you for additional living expenses if your property or residence is not habitable due to the fire. This is called the “loss of use” clause.
Keep track of your living expenses since you’re entitled to the difference between:
- The costs you spent while you and your loved ones were displaced (such as living in alternative accommodations or hotels);
- The costs to keep your residence or property (repairs or rebuilding expenses).
Get Repair Estimates and Keep Receipts
Try to consider hiring an independent estimator or a public adjuster so you can get repair estimates. If you decide to proceed with repairing what you can, keep all the receipts of every financial transaction related to your property’s restoration process.
This includes the cost of the materials, labor, or temporary housing expenses. You should do your best to leave no room for ambiguity.
How Can I Dispute a Denied Fire Claim?
The NFPA said that the latest reported increase in total fires was “statistically significant,” with direct property damage increasing by 13.2 percent in 2022 compared to the previous year.
If your insurance company denied your fire claim, you can always dispute it.
Review The Denial Letter
Insurance companies are legally obligated to give you a fully detailed explanation for denying your claim. Go over the denial letter that they provided and identify if you committed any potential errors or policy misinterpretations.
In case your insurer was unfair and improper in dealing with your case, you can file a report with your state’s insurance board. For example, West Virginia’s Insurance Commissioner oversees how insurance companies operate in the state.
It can impose penalties on your insurance company if they did not comply with the laws that require insurers to handle claims fairly and in good faith.
Seek Legal Assistance
When things get hard, don’t lose sight of what matters. The end goal is still to recover proper compensation from the damage you suffered.
So, when administrative or internal review processes prove to be futile, the best resort is to seek legal representation. Make sure to find experienced insurance claim attorneys to settle the matter for you.
Hire Desai Law For Your Fire Claim
Fire claims may be one of the most difficult cases to handle in the industry since insurance companies are always ready to dodge accountability with their slick and cutthroat legal teams.
At Desai Law, you can trust us to rise above it all and get the job done. We understand the stress and burden that our clients face after a loss like this, and we’re more than ready to help you overcome the challenges ahead. Call (304) 974-1974 now or email email@example.com.