When You're Denied Coverage

When you're denied coverage on your umbrella liability policy or homeowner's insurance policy you have a number of options at your disposal. It is an awkward and inconvenient experience that insurance carriers do not typically create lightly. When this happens it is safe to assume that some thing is seriously amiss. It could turn out to be a miscommunication or a lack of information or any of a not very long list of things. The very first thing to do in this circumstance, then, is to find out why the coverage was denied.

The way to find out is to, quite simply, ask. Normally, the carrier will give a denial in writing, and will state a reason. So read the letter carefully and try to understand fully how the company might have arrived at that decision. Understanding does not mean agreeing with their point of view or decision. It means simply that, try to see their point then examine it to ascertain where there might have been a failure on your part. If you find one, fix it if possible, and speak with an agent about reapplying or go apply elsewhere.

If you are not surprised that you were denied, if you expected it because you were fully aware that there might be a problem your best bet would be to go resolve the issue before applying with this carrier or another again. If you were denied for any reason, a new insurance agent will find out during the investigation both that you have a problem, and that you were denied coverage. It would probably be pointless to try another agent, even if you were willing to pay a massive premium.

Reasons for a Denial

If the issue is that your house fails to satisfy certain ordinances or regulations, there is a probably very easy fix. First, find out exactly what remedial action would fix the problem, then decide it you area able to, or even want to take it on. If it would be a very expensive repair, then perhaps you will need to speak with a mortgage broker or a banker before you speak with anyone else. Or perhaps you could find out about obtaining a waiver, if it is that kind of problem. The issue here would be the decision to resolve it or not, and if so how.

Applicants are sometimes refused coverage because their financials don't look good. If that were the case with you, it would require some serious repairs. If your credit score is very low, and you have no savings or job, or if you are deep in debt, have a bankruptcy on your record, the only way to get past these would be to get a job, earn some money, fix your credit, discharge your bankruptcy if you can. Insurance is a financial service. If your financial record is bad, you will probably have to fix it before a carrier will carry you.

If you have an unacceptable recent history of filing claims, you could find yourself denied coverage. The carrier might choose to not take the risk of your filing a claim soon, even a legitimate one.

If you do not have clear title to the property, if it was bequeathed and is still in probate, and particularly if there is any contention, the carrier may choose to deny coverage. Once you have cleared your inheritance from the court, you may reply again.

There are instances where you might need to speak with a lawyer. In any case, first, understand fully why you were denied and then act decisively to correct it.

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