What are Common Claim Outcomes?
After you make a claim to your insurance company, they are obligated to make a decision on your claim within a certain time frame, often regulated by state laws. They usually will not issue a coverage determination until they have conducted an investigation into your claim. To understand more about how this is done, check out Who Handles an Insurance Claim.
When it comes time to make a determination on your claim, it will have one of three typical outcomes - Approval, Partial Approval, or Denial. We will break down all three.
Approval
In this outcome, the insurance carrier agrees that your loss is covered and agrees with your claimed scope of your damage. They will produce an estimate reflecting the coverage amount. The total dollar amount they initially recognize may not match the true cost to fulfill your restoration. Make sure to verify the amount is enough funds to reasonably complete the restoration work.
Partial Approval
In this outcome, the insurance carrier agrees that some of your loss is covered, but not all. They will produce an estimate reflecting the covered damages and an explanation as to why some items are not covered. Let’s look at a couple examples.
Water - You made a claim for floor replacement due to a water pipe burst. The insurance carrier agrees to offer coverage and agrees that carpet needs to be replaced, but they will not cover the subfloor, as they believe it can be reused.
Hail and Wind - You made a claim for roof replacement due to a recent hail and wind storm. The insurance carrier agrees to offer coverage and agrees that some components of your roof need to be replaced, like vents and a few shingles, but they will not cover additional shingles, as they believe the roof can be repaired instead of replaced.
In the case of a partial approval, you will need to prove to the insurance carrier that the scope is larger than what was initially approved. In the case of your subfloor, point out that the floor has warped, or is retaining moisture. In the case of your roof, hire a professional to conduct a repairability test to show that the roof is too old to be properly repaired.
A loss that is covered but does not exceed your deductible amount is still considered a partial approval.
Denial
In this outcome, the insurance carrier does not recognize your damage as a covered loss. They will produce a letter stating the reason that your claim is denied. Within this communication, they will reference language within your policy document as supporting language for the denial.
Common reasons for a claim being denied include:
The loss was reported outside the claim reporting window.
The policy was not in force at the time of the loss.
The loss was the result of an uncovered peril (for example, some events like earthquakes are often excluded)
The loss was the result of long-term, ongoing conditions like wear and tear or deterioration, not a single covered occurrence.
The loss was the result of a specifically excluded condition (for example, damages caused by a broken water main or sump backup are often excluded)
When facing a denial from an insurance carrier, it is important to verify that their cited reason is valid. A denial does not mean your claim is over, you will just have to make additional efforts to gain coverage. Remember, that most insurance policies obligate the insured party to prove the loss. If you haven’t provided sufficient evidence for the carrier to cover your loss, you need to provide more information.
When facing any of these claim outcomes, don’t get discouraged if the result isn’t exactly what you envisioned. The insurance carrier is motivated to close out your claim as fast as possible, but you always have the power to present more information to gain better coverage. The insurance carrier cannot punish you for fighting for your claim.
If you feel like you are stuck, getting a professional involved to assist with resolving your claim may be a good move. Consider signing up for a Claim Consult with one of our senior adjusters, or Retain a Public Adjuster to represent you.
