In the wake of intense storms that recently battered Wisconsin, many homeowners are now dealing with the aftermath, which includes filing insurance claims for damage caused by wind and hail. This raises an important question: what should homeowners do if their legitimate claims are turned down?
Data from the National Association of Insurance Commissioners reveals a concerning trend: in 2023, more than 37 percent of homeowner claims were denied. This has led to numerous lawsuits nationwide, alleging wrongful denial of claims (source).
“There’s this national trend of insurance companies … covering (fewer) claims and covering less damage,” noted Ryan Graff, an attorney specializing in insurance disputes at MGW Law in Manitowoc.
Many policyholders are also grappling with rising nonrenewal rates by insurers. In particular, one Wisconsin county reported a 150 percent increase in homeowners dropped by their insurers in 2023 compared to five years ago. (source).
Ensuring Accurate Damage Assessment
Post-storm inspection is critical for homeowners. While some damage like basement flooding is visible, others, such as roof damage from hail, might not be as evident. “I’ve never personally been on my roof. I think most people have not been on their roof. So typically it’s a third party that identifies hail damage,” Graff explained. Homeowners should consider hiring a local contractor or public adjuster to assess the damage accurately.
Importance of Thorough Documentation
“The insurance company is going to be documenting everything on their side with what’s called claim notes — every phone call, every activity,” said Graff. Homeowners should maintain a similar level of documentation. If a claim is denied, the insurer must provide a written explanation, giving policyholders essential information for contesting the decision.
Understanding Policyholder Rights
Wisconsin’s Unfair Claims Settlement Practices Act, or Ins. 611, ensures that policyholders are treated fairly. This legislation mandates that insurers respond to claims promptly and conduct thorough investigations. “Policyholders have a lot more rights than they understand,” Graff highlighted.
Options for Denied Claims
Homeowners who feel their claims have been unjustly denied can pursue legal action with the help of public adjusters or insurance attorneys. “The insurance company has their team of professionals, and there are resources for Wisconsin residents,” Graff asserted.
Filing Claims vs. Risk of Nonrenewal
Amid rising nonrenewal rates, some homeowners fear that filing a claim could jeopardize their policy renewal. Graff advises against letting this concern deter action. “I have yet to see a straight line between somebody making a claim and getting dropped,” he stated, adding that nonrenewal is more often due to unrelated issues identified during inspections.
