Reasons Insurance Companies Deny Fire Claims

Reasons Insurance Companies Deny Fire Claims

After wind and hail, the most common cause of homeowners insurance claims is fire and lightning. In 2021, wind and hail accounted for 39.4% of property damage claims, while fire and lightning accounted for 24.8% of property damage claims, according to the Insurance Information Institute (III or Triple-I).

This isn’t surprising as a house fire is a fairly common occurrence in the U.S. According to the Triple-I, a house fire occurs every 87 seconds in the country. This averages to 358,000 residential fires annually, according to Center for Disease Control (CDC), the U.S. Fire Administration and the National Fire Protection Association (NFPA).

These government agencies estimate that house fires cause nearly $12 billion damage each year and $11.1 billion is lost to property damage caused by residential fires. 

As a homeowner paying insurance premiums, you’d expect to receive your fire claims to help you rebuild and recover. Unfortunately, fire claims generally have a low success rate, and it doesn’t help that insurers have the right to deny your claim. Insurers have various reasons for denying a fire claim, but here are some of the most common ones. 

Inadequate or Insufficient Coverage

This means that you own an insurance policy that doesn’t cover the incident that caused the fire or the type of damage that ensued. In other words, your policy is limited to what incidents or types of damage it can cover and this particular case doesn’t fit that criteria. 

For instance, your policy might stipulate that it only covers fire damage but not water or smoke damage. So, it will only provide remuneration for damages that are the direct result of a fire, but not for damages brought about by the ensuing smoke or water damage caused by fire sprinklers.

In addition, your insurance policy might also be limited to only specific types of fire damage. For instance, it might not pay for damages caused by wildfires, war or “acts of God.”

As your insurance company is only obligated to pay for covered perils outlined in your policy, it will deny claims that are outside its coverage. 

Non-Payment or Missed Payment of Insurance Premiums

Another common reason why insurers deny fire claims is missed premiums. This happens when you missed to pay your premiums, you did not pay your latest premiums or you did not pay your premiums on time.

When this happens, it means you have failed to meet your obligations, which is to pay your premiums and pay them on time. Simply put, if you failed to keep your insurance premiums up-to-date, your insurer has no obligation to pay for the fire damages. 

Lack of Evidence or Documentation

All insurance claims require proper documentation. This includes pictures, repair estimates and invoices, and any other supporting documents that prove the existence of fire damage and the resulting losses or expenses. 

For instance, you must prove ownership of the items that were damaged or lost in the fire. You must also have records or documents stating the value of the damaged items, which includes your property, belongings and all other insured things. Last but not least, you must also provide enough evidence of the extent of the fire damage. All of the evidence must be verifiable too. 

When one or more of the necessary evidence is missing or cannot be verified, your insurance company will deny your claim. 

Property Value Dispute

Following up on the above, another common reason by which insurers deny your fire claim is by disputing the valuations. As much as you want to avoid getting a compensation that is way below the amount of losses you’ve suffered, you also don’t want to file a claim for an amount that is above what the actual damage is worth. 

When you lack proof or evidence for your claim, you open the door for disagreements over the valuation of your property and belongings as well as the amount of replacement costs. That is why it’s essential to maintain accurate records that prove, without a doubt, how much an item is worth. You can also ask the help of a professional appraiser to make the proper valuations for you, especially when the insurance company makes a lowball offer. 


Misrepresentation is providing false or misleading information. In short, it’s being dishonest. While you might get away with white lies every once in a while, dishonesty must be avoided both when purchasing insurance and when filing claims with an insurer. 

In insurance, misrepresentation means lying or stating incorrect information as well as omitting or concealing information, especially those that might influence an insurance company’s decision on your claim. 

However, whether or not you stated the facts in your application will soon be found out, as your insurer will conduct its own investigation regarding your claim. Misrepresentation will only lower your chances of approval, so it’s best to avoid it altogether. 

Unpermitted Work

As a homeowner, you have the responsibility to keep your home in good condition. However, you need to do so properly. This means fixing issues with the necessary inspections and permits as well as working only with licensed professionals for all maintenance and repair jobs. And, you must keep records of all their works in the event that you need to file a claim.

In other words, you should not DIY any issues at home. If you do, you risk denial of your claim. 

For instance, don’t do any electrical work yourself. In case faulty installation or faulty wiring becomes an issue and starts a fire, your insurance company will deny your claim because you did not maintain your property correctly. 

Defective Workmanship

Fires can get started because of poor construction design or defective workmanship. This basically means that some portion of your house was built poorly. If this is the case, your claim will be denied. 

Faulty construction or repairs can result from a contractor’s lack of skill or negligence, which oftentimes happens when homeowners work with a builder without the proper licenses and permits. 

Another reason an insurance company denies a claim is when they find out that you’ve used defective materials or those with poor fire protection qualities. For instance, materials that have been recalled by manufacturers or relevant authorities.

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