Recently, a 6.6-magnitude earthquake hit Afghanistan, damaging buildings, triggering landslides and sending people running out of their homes into the streets. Strong earthquake tremors were felt as far as in India including Jammu and Kashmir, Punjab and the National Capital Region.
With scenes of the Turkey earthquake fresh in mind, people are more wary than ever of such natural disasters occurring so frequently. Thankfully, no casualties or any major damage was reported in India even as deaths were reported in Afghanistan and Pakistan.
However, the incident brought into focus the importance of home insurance, which is an essential aspect of financial planning, especially in a country like India where natural disasters such as floods, earthquakes, and cyclones are all too common.
With the growing number of residential properties in urban and rural areas, the importance of home insurance cannot be overstated. It protects homeowners from potential financial losses due to damages caused by natural disasters, theft, or any other unforeseen circumstances.
Choosing a home insurance policy is a crucial decision and before selecting a policy, it is important to evaluate the risks associated with the property, such as location, the value of the property, and potential hazards.
After all, it could be a harrowing experience if you have a home insurance policy and yet, when something unfortunate happens, your claim ends up getting rejected. To avoid such a scenario, it is important to know the main reasons which can lead to a home insurance claim getting denied.
READ MORE: Why choose home insurance as an effective shield against natural disasters like earthquakes?
This is one of the main reasons for the rejection of a claim. Most home insurance policies have specific exclusion clauses that outline the types of damages or losses that are not covered under the policy. Policyholders in high-risk areas must make sure that natural disasters are covered under their policy. If you need to buy an add-on feature to get this cover, you must explore that.
Also, insurance policies do not cover damages that occur due to normal wear and tear or lack of maintenance. For instance, if a policyholder fails to maintain their roof, and it collapses due to damage, the insurance company may reject the claim. Damages caused by acts of war or civil unrest are also common exclusions. So, damages due to foreign invasion or war-like operations might not be covered, irrespective of whether war is declared or not.
Delay in reporting the claim
Policyholders must report the damages or loss as soon as possible. Delaying the claim could result in the insurer rejecting the claim, as they may question the validity of the claim. The reason for this is that the insurer needs to investigate the incident promptly to determine the validity of the claim and assess the damages. Due to the delay, it may be too late to investigate properly.
For instance, if the damages occurred due to water leakage, the insurer may need to investigate the source of the leak promptly. Delay can result in the loss of evidence, making it difficult to assess the claim. Moreover, many insurance policies have specific deadlines for reporting a claim.
READ MORE: How to protect your homes financially from flood damages with home insurance policies
Failure to disclose information or giving false information
When purchasing an insurance policy, it is essential to provide accurate and complete information to the insurer. Failure to disclose relevant information or providing false information can lead to claim rejection. The reason for this is that the insurer relies on the information provided to assess the risk and calculate the premium. If the information is inaccurate or incomplete, it can result in the insurer providing coverage for risks that they were not aware of or charging a premium that is not appropriate for the actual risk.
For instance, if a homeowner provides false information about the security measures in place in their home and a burglary occurs, the insurer may reject the claim. It is also essential to disclose any changes in the risk associated with the property. For instance, if a homeowner install a swimming pool, it is essential to inform the insurer as it can increase the risk of accidents. Failure to do so can result in the insurer rejecting the claim if the claim is related to the swimming pool.
In the event of a claim, homeowners are required to provide adequate evidence to support their claim. Failure to do so could result in the claim being rejected. For instance, when filing a claim, it is essential to provide documentation to support the claim. If a homeowner is filing a claim for damage caused by a storm, they will need to provide photographs of the damage and documentation of the repairs that were made.
The claim may also get rejected if there are discrepancies in the evidence provided by the policyholder. For instance, if the policyholder claims that the damage was caused by a storm but the evidence suggests otherwise, the insurer may reject the claim.
In conclusion, while home insurance provides a crucial safety net for policyholders, it is essential to understand the terms and conditions of the policy to avoid any surprises when making a claim. Customers should always disclose all essential information; take reasonable care of their property, and report damages as soon as possible. By doing so, you can ensure that your claims are not rejected and that you have adequate coverage in the event of any unforeseen circumstances.
Tarun Mathur, Chief Business Officer - General Insurance, Policybazaar.com