Putting The Power In The People’s Hands

When does pre-existing damages become a reason for claims denial?

On Behalf of | Sep 17, 2023 | Homeowner Claims

Many homeowners have met a common issue: the denial or reduced payouts for their homeowners’ insurance claims due to “pre-existing damage.” This is a common situation that affects a substantial number of property owners in the state. Insurance companies often argue that the problems in question existed before the event that prompted the claim.

Why are pre-existing damage not covered?

Insurance exists so that they can provide financial support for new or unforeseen property damages. These are not supposed to handle problems that already existed before the policy started. This helps insurers manage risk and keep insurance costs affordable for policyholders.

Common reasons for denial

Insurers may deny or reduce the payout for a claim due to several reasons:

  • Exclusion clauses: Insurance policies frequently leave out coverage for known or pre-existing conditions. Examples of these may include structural issues, water damage and termite infestations.
  • Lack of maintenance: Insurance companies may deny claims if they figure out that the damage resulted from a lack of proper maintenance. For example, if roofing problems were present before obtaining insurance, but no action was taken to address them, a subsequent claim might be denied.
  • Nondisclosure: Insurers are likely to deny your claim if you do not disclose known pre-existing damage when you purchase the policy. Remember that insurers rely on correct information to assess risk and decide coverage.
  • Causation: If pre-existing damage contributes to the cause of a claim, insurers may deny coverage for the entire claim. For instance, if pre-existing water damage worsens due to a covered event, the insurer may argue that the initial damage caused the subsequent loss.

The insurance policy may have specific terms and conditions that clearly say they will not cover or will limit coverage for certain types of pre-existing damage. So, make sure that you understand your policy’s terms and limitations.

Prevent denial of your claim

To prevent claim denials related to pre-existing damage, make sure to show all known issues when obtaining insurance. You can always seek professional help to get a clear understanding of what you need to disclose.

In addition, you should also take the necessary measures to maintain your property, conduct regular inspections and prompt repairs. Do not forget to keep records of maintenance and renovations as you can use these as evidence if needed.

These proactive steps can help minimize the risk of claims denial due to pre-existing issues.