Experiencing the loss of your home to a fire is devastating, but having your home insurance claim denied adds even more stress and uncertainty to your situation.
Insurance claims are meant to provide relief during these difficult times, but insurance companies don’t always act in good faith. Denials can stem from policy exclusions, disputes over the value of your property, or even clerical errors.
As an L.A.-based company, we’ve seen the terrible aftereffects of the wildfires in our community and want to help those in need.
If your home insurance claim has been denied, don’t lose hope—there are steps you can take to advocate for your claim, explore alternative options, and rebuild your life.
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Why might your home insurance claim be denied?
Insurance companies might deny claims for various reasons, including:
- Policy exclusions: Certain types of damage, such as those caused by earthquakes or negligence, may not be covered.
- Underinsurance: If your policy’s coverage limits are too low to cover the full extent of the loss, the insurer may deny or reduce the claim.
- Misrepresentation or errors: Any discrepancies in your application or policy details might result in a denial.
- Disputes over value: Insurers may contest the estimated cost of rebuilding or repairing the property.
Once you understand the reason behind the denial, your next steps can become more evident.
Steps to take when your claim is denied
When your home insurance claim is denied, you can challenge the decision and secure the necessary funds.
1. Review the denial letter and your policy
Carefully review the insurer’s denial letter. The specific reasons for the denial and reference sections of your policy should be outlined.
Compare these details to your policy documents to ensure the denial aligns with the terms of coverage.
2. Hire a public adjuster
These are independent professionals who work on behalf of policyholders to evaluate and negotiate insurance claims.
Unlike the adjusters hired to represent the insurer’s interests, public adjusters are solely focused on maximizing your settlement.
Benefits of hiring a public adjuster:
- They can identify errors or discrepancies in the insurer’s assessment
- They negotiate directly with the insurance company to secure a fair payout
- They have expertise in interpreting complex policy language and valuing losses
While public adjusters charge a fee (generally, a percentage of the settlement), their involvement can significantly increase your chances of a favorable outcome.
3. Contact your state’s insurance commissioner
If negotiations with your insurer stall, you can file a complaint with your state’s insurance commissioner. The California Department of Insurance oversees insurance companies to ensure they operate fairly. Filing a complaint can prompt the insurer to revisit your case and comply with regulatory standards.
4. Consider legal action
In extreme cases—where bad faith practices are evident—consulting an attorney specializing in insurance disputes may be necessary.
Legal action can compel the insurer to honor your claim or pay additional damages for acting in bad faith.
Exploring alternative options
If challenging the denial doesn’t yield the results you need or you can’t wait for a lengthy appeals process, you may need to consider other ways to move forward.
1. Rebuild your home
If you wish to stay on your property, rebuilding is often the most practical solution.
Financing this effort without an insurance payout can be challenging, but options are available.
Government assistance
- FEMA grants: The Federal Emergency Management Agency offers disaster relief grants for essential rebuilding costs.
- SBA Disaster Loans: Low-interest loans from the Small Business Administration can help homeowners rebuild or repair properties.
Private construction loans
For those who don’t qualify for government assistance or need funds quickly, private lenders like Marquee Funding Group offer construction loans tailored to individual needs.
With flexible underwriting and quick approvals, Marquee can provide the necessary financing to rebuild without delay.
2. Sell the property as-is
Selling a fire-damaged home may be viable if rebuilding feels too overwhelming. The proceeds can help you start fresh elsewhere or invest in a new property.
The land retains value even in its damaged state, particularly in high-demand areas.
- Sell to investors: Real estate investors often purchase damaged properties to rebuild and resell.
- Consult a real estate agent: Connecting with an agent experienced in fire-damaged properties can help you secure the best possible price.
3. Secure temporary housing
If your home is uninhabitable, you’ll need a place to live while navigating your options.
Some resources to consider:
- Rental assistance: FEMA and local nonprofits may offer temporary housing assistance.
- Bridge loans: A short-term bridge loan from a private lender like Marquee Funding Group can cover temporary housing expenses or other immediate needs while you pursue long-term solutions.
How Marquee Funding Group can help
When your home insurance claim is denied, it can feel like an uphill battle, but you don’t have to face it alone.
As a Los Angeles-based private money lender, Marquee Funding Group understands the challenges faced by homeowners in wildfire-prone areas.
Our expertise in private lending can offer an invaluable lifeline for those dealing with the aftermath of fire damage and denied insurance claims.
Why choose Marquee?
- Quick approvals: Marquee’s streamlined application process means you can access funds in days, not weeks.
- Flexible solutions: Their common-sense underwriting focuses on property value rather than rigid credit requirements, making our loan types more accessible to a broader range of borrowers.
- Comprehensive support: Marquee offers construction loans for rebuilding and bridge loans to cover immediate expenses, ensuring you have options tailored to your unique circumstances.
Reach out to us with your scenario. Even if you’re not ready to take out a loan, Marquee Funding Group is available for advice and guidance, helping you explore all avenues for recovery.