Why Home Insurance Claims Are Rejected

Having home insurance will protect you from “what if” moments like if your home burns down or gets flooded and damaged.

If your property has been damaged or destroyed, you are likely to feel overwhelmed by the loss and by the repair, replacement and recovery process that lies ahead. If your property was insured, that insurance policy is the best way to get you back home.

Having a home insurance policy doesn’t automatically mean every claim will be paid out. According to the Ombudsman for Short-Term Insurance (OSTI), complaints about rejected claims increased by 17% in 2020 and continue to be the main basis for consumer dissatisfaction with homeowners’ insurance coverage.

If an Insurance company finds out that damage was caused due to lack of maintenance they can deny your claim.

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What is Home Insurance

Building Insurance covers you against risks to your property. In most cases, you get protection against fire, lightning, wind, flood, earthquakes, theft and vandalism, but every Insurance company is different hence it’s important to read and understand your benefits.

If you’ve just bought a home and you’re paying for a home loan, this type of insurance is compulsory. It covers everything from the physical structures on your property, such as your home and its outbuildings, but it doesn’t cover items inside the house like your electronics and furniture, this is covered by a home contents insurance policy.

For example, if someone breaks down your window or door and goes into your house and steals your TV. The provider will only fix the door and window.

What does Home Insurance Cover

More and more home insurance claims are rejected every day! It’s important to go through your insurance coverage agreement and understand the clauses, terms and conditions and excess you will be expected to pay in the event of a claim.

Common issues covered by Insurance

Fire or explosion
Flooding
Burst, leaking or overflowing geysers or water-heating systems and water pipes
Natural Disasters: Wind, lightning, storms, hail, flood or snow
Outbuildings
Driveways
Walls
Garages
Fences
Patios
Swimming pools
Boreholes
Swimming pool and spa pumps
Gate motors
Tennis courts
Underground pipes and cables

Issues not covered by Home Insurance

Damages or repairs to a home due to negligence or wear and tear.
Theft and attempted theft of furniture

Essential areas of home maintenance

When our loss adjusting teams go out to inspect client’s properties, clients will often point out maintenance they have done to prevent further damages, these include:

Pruning trees and any dead or low-hanging branches to prevent them from falling onto cars or the roof of the house during windy and stormy days.
Cleaning of gutters
Painting and waterproofing exterior walls of property including boundary walls
Replacing cracked or broken roof tiles
Repairing or replacing visible leaking pipes
Identifying faulty electrical connections, light switches and plug points and calling out a qualified electrician to inspect and repair

How much is Home Insurance

When you contact the insurance company for a quote they will ask for various information like your address, how many bedrooms and bathrooms does your home have; do you have carpets, do you have a fireplace, do you have a pool?

You should not make the mistake of using the market value of your home to calculate its worth. The replacement value would be the estimated figure of how much it would cost to rebuild your home to the state and condition it was in before it was damaged, this should include all professional fees required to rebuild the property.

To calculate your home’s estimated replacement value, seek a professional property valuation expert or a building contractor. As a homeowner, it’s your responsibility to make sure that the sum insured is reevaluated and if necessary, increased each year to cater for the risk related to building costs

Your monthly building insurance premium is a fixed amount required by your insurance provider to provide cover for a defined period of time – generally depends on the size of your home loan and the value of your property.

Angela Vernes, Head of Operations for Nedbank Insurance joins us to chat about the importance of home maintenance, the two main reasons why home insurance claims get rejected, and what are some considerations banks take into perspective when one claims for insurance.