If you own a home, chances are good that your mortgage lender requires you to carry a certain amount of insurance coverage on the property. You may have shopped around for a good rate, one that would fit into your budget for owning a home. After purchasing the policy, you may have never given it another thought except when you pay the monthly premiums or when the Colorado winds threaten to blow the shingles off you roof.
In the event that you would need to file a claim, do you know what your policy covers? One of the most frustrating things a homeowner can experience is when the house sustains some damage and the insurer denies the claim for coverage. You may wonder how this can happen when you pay your premiums on time. You may be surprised at how frequently it occurs.
Is the insurer in the right?
One of the most common mistakes policyholders make is failing to carefully read their policies. You may think your policy covers just about anything that comes along, and this may provide you with peace of mind that allows you to sleep at night. However, your policy may have some surprises you did not expect. For example, any of the following may be valid reasons for your insurer to refuse to cover your claim for damages to your home:
- The insurer determines you could have prevented or minimized the damage to your home with appropriate maintenance. For example, if your inspector recommended replacing your roof, the insurer may deny your claim if a storm causes your roof to collapse.
- You are filing a claim for damage that your policy does not cover. Many policies contain exclusions, such as flood or earthquake damages, which means your insurer will not cover these expenses or you must pay extra to add coverage for these perils to your policy.
- You are seeking more compensation than your policy covers. It is important to know how much coverage you are carrying in case a tragedy results in the total loss of your home.
Your policy will also outline how to file a claim, including the statute of limitations. If you wait too long to request payment, the insurer may deny your claim because delaying to repair damage often makes repairs more expensive. However, you should not assume that a denied claim is your fault. It is possible that the insurer is acting in bad faith by denying, underpaying or delaying a response to your legitimate claim. It is wise to deal with these unfair tactics with the help of a skilled attorney.