How to Avoid Coverage Denials by Your Homeowner’s Insurer Following Loss of Personal Property

Although the typical homeowner's insurance policy affords coverage for personal property within the insured home, insurance claims for lost contents can be denied for a variety of reasons. Policy exclusions and limitations are common sources of coverage denials. In addition, insurance companies occasionally deny coverage for personal property loss if the homeowner is unable to provide adequate substantiation of the lost property, or may offer reimbursement for only a portion of the actual cost of the lost property. Inadequate substantiation of the property’s cost or value is again a common reason for such action. The homeowner can take several proactive measures to minimize the likelihood of such controversies.

Instructions

Difficulty: Moderate

Things You’ll Need:

• Fireproof safe
• Camera or camcorder

1. Thoroughly review your homeowner’s insurance policy, as well as any amendments. Pay particular attention to exclusions, which may eliminate coverage for certain home contents or types of losses. Ask your agent about any ambiguities.
2. Ensure that the policy’s coverage limits are sufficient to cover the replacement costs of the home and its contents.
3. Store copies of receipts of any high-cost or unusual possessions in a fireproof safe or safe deposit box.
4. Periodically take photographs or video of the interior of the house to further substantiate your possessions. Store the photographs and video in the fireproof safe.

Tips & Warnings

• Conduct a periodic inventory of the home. Keep count of items such as DVDs and CDs. A large collection of these relatively low-cost items can total thousands of dollars.
• Obtain a professional appraisal of antiques, artwork and other high-dollar items.
• Only substantial losses should be reported to your insurance company. Insurers have very low tolerance for repeat claimants and are more likely to scrutinize, and possibly deny, subsequent claims.
• Always review the actual insurance policy for coverage exclusions, even if your agent tells you that a loss will be covered. Such verbal statements may not be enforceable in the face of clear policy language to the contrary.