Avoiding Claim Denials

Insurance companies don’t like paying claims. The more mistakes you make, the easier it is for them to deny or underpay your loss. A denial usually isn’t because of fraud—it’s because the process wasn’t followed the way the policy requires. This guide shows you exactly how homeowners sabotage their own claims and how to avoid every one of those traps.

If you haven’t built a solid documentation system yet, start with documenting your home. Almost every denial starts with weak evidence.

1. Delayed Reporting

The number one denial trigger is waiting too long to report the loss. Insurers require “prompt notice.” That’s vague on purpose—they decide what “prompt” means.

• Damage worsens while you wait
• The cause becomes harder to confirm
• Weather records may no longer match your claim

Report the claim immediately. Not next week. Not after getting a quote. Now.

2. Not Mitigating Further Damage

Insurers expect you to protect the property from additional harm. If you fail to do that, they can deny part—or all—of the claim.

• Tarp damaged roofs
• Shut off leaking water lines
• Board up broken windows
• Remove standing water if safe

They pay for the original event—not the damage caused by waiting around.

3. Claiming Excluded Losses

Many homeowners don’t read their exclusions and assume insurance covers everything. It doesn’t.

• Rising water → denied (requires flood insurance)
• Earth movement → denied (earthquake coverage needed)
• Wear and tear → denied every time
• Neglect or maintenance failures → denied

A claim only applies when the loss fits the policy’s covered perils.

4. Destroying the Evidence

Homeowners panic and start cleaning before documenting anything. This is a massive mistake.

• Don’t throw away damaged items yet
• Don’t rip out flooring until photographed
• Don’t wipe soot or water damage before capturing it

Take detailed photos and videos before anything moves or gets cleaned.

5. Starting Full Repairs Before the Adjuster Arrives

Emergency mitigation is required. Full repairs are not.

• Adjusters need to see the original damage
• Contractor repairs remove critical evidence
• Insurers use missing evidence as a reason to deny

Patch—not repair—until the adjuster signs off.

6. Not Proving the Value of Lost Items

Insurers need proof you owned the items and what they were worth.

• Receipts
• Bank statements
• Photos of items inside the home
• Serial numbers when available

If you don’t have an inventory system, use the home inventory checklist now—not after a loss.

7. Misrepresenting or Guessing About Damage

Guessing looks like lying. So does exaggerating. Both get claims denied instantly.

• Stick to what you know
• Use contractor estimates for technical details
• Stay consistent between your first report and later statements

Insurers compare everything you say to the adjuster’s notes. Don’t give them contradictions to exploit.

8. Missing Deadlines or Failing to Follow Instructions

Claims have deadlines for submitting documents, signing forms, and providing proof of loss.

• Miss the deadline → claim stalls
• Ignore requests → claim denied
• Turn in incomplete paperwork → claim delayed

Stay organized. Keep a claim folder with dates, documents, and notes.

9. Not Understanding Your Deductible and Payout Structure

Homeowners who don’t understand ACV vs RCV or how deductibles work often think they were underpaid when they weren’t. Confusion leads to conflict.

For clarity, review the guides on deductibles and ACV vs RCV.

10. When to Bring in a Professional

• Public adjuster for complex or high-dollar losses
• Contractor estimates for structural issues
• Attorney only for clear bad-faith situations

Most claims don’t need outside help—but some absolutely do. Don’t wait until the insurer has already boxed you in.