What to do when your claim is denied

A denial letter is engineered to feel final. It's formal, it cites your policy by section number, and it rarely invites a conversation. But a denial is a decision made by a person or a model applying a rule, and decisions can be wrong, incomplete, or based on a reading of your policy that isn't the only one. Plenty of denied claims get paid after the policyholder pushes back with the right evidence.

Here's how to work through one methodically instead of taking it at face value.

Step one: read the letter for the exact reason

Every legitimate denial has to tell you why. Find the specific reason and the exact policy language it leans on. "Not covered" is not a reason; "excluded under Section I, water damage from an excluded source" is. You can't challenge a denial you haven't pinned down.

Common reasons claims get denied

Most denials fall into a handful of buckets. Knowing which one you're in points you at the counter-argument:

• Excluded peril. The cause of loss (flood, earth movement, wear and tear) is one your policy doesn't cover. The fight is usually over what actually caused the damage.
• Insufficient documentation. The insurer says you didn't prove the loss or its value. Often the most fixable: you supply what's missing.
• Disputed cause or value. They agree something happened but disagree on the cause, the scope, or the dollar amount. This is a valuation fight, not a coverage fight.
• Late notice. You reported the claim outside the window the policy expects. Whether this defeats a claim often depends on whether the delay actually prejudiced the insurer.
• Policy lapse or non-payment. Coverage wasn't in force on the date of loss.
• Material misrepresentation. Something on your application is said to be inaccurate. Serious, and worth understanding precisely if it's cited.
• Failure to mitigate. The insurer argues you let the damage get worse after the loss instead of taking reasonable steps to limit it.

Your options after a denial

1. 1

   Get everything in writing

   Request the denial, the exact policy language, and the reason. Get it on paper or by email. A written record is the foundation for everything that follows.

2. 2

   Request your complete claim file

   Ask for the adjuster's notes, photos, estimates, and any third-party reports. You're checking whether their facts match yours.

3. 3

   Re-read the cited provision against your policy

   Pull the actual clause. Does the exclusion or condition really fit what happened? Coverage often lives in the gap between the cited rule and your facts.

4. 4

   Gather counter-evidence

   Dated photos, an independent repair estimate, receipts, maintenance records, or a professional's opinion on the cause of loss. Evidence moves denials; frustration doesn't.

5. 5

   File a written appeal or ask for reconsideration

   Respond to the denial point by point, attach your evidence, and ask for a specific decision. Address the exact reason they gave, not the claim in general.

6. 6

   Consider the appraisal clause for value disputes

   If you agree the loss is covered but disagree on the amount, most policies include an appraisal process where each side picks an appraiser and a neutral umpire decides. Appraisal resolves the amount, not whether something is covered.

7. 7

   File a complaint with your state Department of Insurance

   Every state has one. A DOI complaint puts your dispute in front of a regulator and often gets a more careful second look. It's free and it creates a record.

8. 8

   Bring in a professional for large or complex denials

   A licensed public adjuster (for valuation) or an attorney (for coverage and bad-faith questions) can be worth it when the amount is significant. Understand how they charge before you sign.

A denial narrows the question to one specific reason, which is exactly what makes it answerable. Read that reason closely, check it against your policy and your facts, and respond with evidence rather than argument. That's the same job Koala does automatically: read the denial, find the basis to challenge it, and draft the response. You approve every word before it goes anywhere.