Commercial property insurance claims can be denied for a variety of reasons. However, there are steps that policyholders can take to fight those denials. In addition to fighting denials, insurance policyholders also retain the right to file a legal action against the insurance carrier if that carrier has acted in bad faith by wrongfully denying a claim.
This article will provide an overview of some of those steps and examples of common reasons for claims to be denied.
Fighting a commercial property insurance claim denial can be difficult, but it is not impossible.
Here are three tips for how to respond when your claim has been denied.
1. Understand the reason for the denial
The first step in fighting a denial is understanding why the claim was denied in the first place.
This can be tricky, as insurance companies often give very little information about why a claim was not accepted. However, insurers are required by law to provide a thorough and reasonable explanation for the denial of a claim. By reviewing the denial letter and any accompanying documentation, policyholders can often get a sense of why their claim was rejected.
It is also important to remember that insurance companies are not always correct in their reasoning. Review your insurance policy in full and ask the company for specifics about why the claim was denied. Check the reasons stated by the insurer against the actual terms of your policy. Be sure to review all endorsements and riders to the policy, as oftentimes these amendments change the policy’s terms and may provide coverage where otherwise the policy would exclude it.
If policyholders believe that the insurance company is wrong in assessing a claim, they should be prepared to argue their case, potentially in a legal venue. An insurance claim lawyer can help you.
2. Collect evidence
To persuade the insurer to change its decision, policyholders must often provide evidence to support their argument.
This evidence can come in many forms, including:
- Copies of invoices or other documentation related to the claim
- Documentation related to the property damage
- Letters or emails from the insurance company regarding the claim
- Statements from witnesses
- Photographs or video footage of the damages claimed
- Valuations of the property damage from contractors or other experts
If this applies to your situation, you should gather as much evidence as possible and keep it organized and easy to access.
3. Speak with an attorney
Fighting a commercial property insurance claim denial can be complicated and time-consuming.
Trying to argue with the insurance company on your own is difficult. Hiring a lawyer shows the insurance company you’re serious and protects your rights.
Attorneys who specialize in insurance law understand the process of appealing a claim denial and can help policyholders build a strong case. At Keating Wagner, we have extensive experience reviewing denied claims and building strong cases on behalf of policyholders.
3 Examples of Common Reasons for Denied Commercial Property Insurance Claims
1. The policyholder failed to follow the insurance company’s rules and regulations.
In one case, the policyholder’s business was damaged in a fire. The policyholder failed to notify the insurance company of the fire within the required time frame. The insurance company denied the claim because the policyholder had not complied with their rules.
If you have reported your claim in a timely manner, however, the insurance carrier should not decline your claim. Keep proof of all submissions and communications with the carrier.
2. The damages were not covered under the policy
Another common reason for a claim denial is when the damages are not covered under the policy.
For example, if a business experiences a theft, but the policy excludes losses due to theft, the insurance company will likely deny the claim.
In many cases, however, you could still be in the right with your insurance claim. The specifics of the damage are very important, so it’s recommended to work with an insurance claim attorney to review your coverages and fight back when the insurance company is wrong.
3. The insurance company believes that the claim is fraudulent
Commercial property insurance companies sometimes deny claims because they believe the claim is fraudulent. In these cases, the insurance company will often launch an investigation into the claim, ask to take the policyholder’s examination under oath, and have a lawyer request other information.
If you submitted your claim legitimately, however, it can be very frustrating and damaging to be accused of a fraudulent claim. Insurers cannot legally deny a claim based on fraud unless they can reasonably prove the allegation. An experienced insurance attorney can advise you during the claim process, protect you from an insurance company’s harassment, and ensure that the insurance company does not overstep its bounds.
What is Insurance Bad Faith?
In some cases, the insurance company takes advantage of a claimant. This is known as bad faith. Insurance bad faith is a legal term that refers to when an insurance company behaves in an unreasonable way in dealings with a policyholder.
Some of the most common examples of bad faith include:
- Refusing to pay a claim without a legitimate reason
- Failing to investigate a claim properly
- Offering an unreasonably low settlement amount for a claim
- Wrongfully denying a claim that should be covered
- Unreasonably delaying payment of a covered claim
Insurance bad faith can cause significant financial harm to policyholders and is often a reason to file a lawsuit against an insurance company.
Get In Touch With Keating Wagner Polidori Free
If your commercial property insurance claim has been denied or you feel the insurance company is treating you unfairly, Keating Wagner Polidori Free can help.
Our attorneys specialize in insurance law and are prepared to fight for your rights.
Call us today to schedule a free consultation with an insurance claim lawyer to fight for what you deserve.