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Reasons insurance companies deny fire claims. A complete guide.

Fire insurance claims

Regarding fire claims under your home policy, filing an appeal and successfully receiving the settlement you deserve is possible. However, your insurance company has the right to deny your claim for specific reasons.

Research suggests that home insurance claims have the lowest success rate out of all insurance claims. In contrast, car insurance claims have the highest success rate and are nearly always successful.

Understanding why insurance companies reject fire claims can increase your chances of a successful claim, even if it doesn’t guarantee that your insurer will pay out.

We will examine why your insurance company may deny a fire insurance claim to help you prepare for making a claim. This guide lists the most common reasons insurance companies deny fire claims.

Table of contents

  • What is a fire insurance claim?
  • Why are fire claims rejected?
  • Reasons insurance companies deny fire claims
  • What can you do if your fire claim is denied?
  • How to prevent fire claims from being denied

What is a fire insurance claim?

Firstly, what is a fire insurance claim, and how can a fire insurance claim protect you as a homeowner?

A fire insurance claim against your home policy is the process of filing for help with the cost of damages following a house fire.

The claim must inform the insurance company how the event occurred, supporting evidence, and the damaged property's cost.

If the claim is successful, you will usually receive the equivalent of the actual cash value of your property and the specified agreed amount. You can then use that to repair or rebuild your home.

Why are fire claims rejected?

Some insurance claims get denied, and sometimes the requested amount isn’t always paid in full. It’s part of the claims process for insurers to find reasons to underpay or deny a claim

That’s why it’s essential for a homeowner to know the reasons insurance companies deny fire claims and how to dispute a rejected claim.

Reasons insurance companies deny fire claims

Here are 10 common reasons insurance companies deny fire claims.

  1. Misrepresentation
  2. Insufficient coverage
  3. Illegal activities
  4. Suspected arson
  5. Unpermitted work
  6. Defective workmanship
  7. Negligence
  8. Damage disputes
  9. Valuation disputes
  10. Missed insurance premiums


Insurance companies frequently deny fire claims due to misrepresentation. Misrepresentation means that the insured misrepresented certain details to their insurance provider, such as omitting or lying about information.

It’s not only incorrect information that causes issues. Withholding information can also lead to a rejected fire claim - that goes for the home policy details and the claim.

Suppose your pet knocked a candle over and started a major house fire. You might jeopardize your claim if you say that the candle tipped over on its own. If you lie about the fact that your pet knocked the candle over, you will be accused of misrepresentation.

Don’t be worried that your insurer will deny your fire claim if you tell the truth. You should always give accurate details about the fire because insurers will investigate the incident.

Tip: Don’t withhold information or lie about previous claims when taking out your home insurance.

Insufficient coverage

Another reason that insurance companies deny fire claims is due to insufficient or inadequate coverage.

Insufficient coverage means that the policy doesn't cover the incident and the type of damages. For example, the policy might cover fire damage, not smoke or water damage. In addition, some policies don’t cover accidental damage.

Your insurance provider must only pay for covered perils as your policy outlines. However, some insurers wrongfully deny fire insurance claims, so knowing your rights and carefully reading your policy is important.

Suppose you believe the fire damage to your home is covered, and your claim was wrongfully denied. In that case, you should get a second opinion from an insurance dispute attorney to help you get the necessary coverage.

Tip: Before filing a claim under your home insurance, carefully check your policy to understand what damages are covered.

Illegal activities

Another reason that insurance companies deny claims, although it is less common, is the evidence and proof of illegal activities.

Although many illegal activities could result in a denied claim, one of the most common examples is the illegal manufacture of drugs or substances.

If your property was involved in the operation of illegal activities, your insurance provider has the right to deny your claim.

Insurers are not obligated to pay for fires that were started by the operation of illegal acts.

Suspected arson

Suspected arson or fraud are two of the most common reasons insurance companies deny fire claims.

Insurance companies sometimes raise this concern to avoid payment. The policyholder may be accused of intentionally setting fire to the property to make an insurance claim.

It’s a process to dispute suspected arson or insurance fraud, as a trial is necessary to prove the cause of the fire. In this case, seeking the right legal representation and insurance claim attorney is essential.

Tip: Your fire claim may be denied if your insurer suspects that you are being untruthful in any way, especially if they have reason to think you started the fire on purpose.

So ensure you give correct information, as any incorrect information, even if it’s accidental, can be used against you.

Unpermitted work

Working with licensed, bonded, and insured electricians is good practice, as they’re trained to perform quality work.

If you or an unlicensed electrician did faulty work in your home, it could badly affect your fire damage insurance claim.

While homeowners are responsible for repairing issues around their properties, improper home maintenance can influence your fire claim’s outcome.

Attempting to fix any issue without the necessary permits or inspections can affect your future claims. This is especially true if the electrical work causes the fire.

Suppose a faulty installation caused a fire. The insurance company can deny your claim. As the insured, you have an obligation to fix issues with all necessary permits and inspections.

Tip: Work with licensed tradespeople for all maintenance and repair jobs.

Defective workmanship

Another common reason that fire insurance claims are denied is defective workmanship or design, meaning that some portion of the house was poorly built.

This is often the case when a builder does not have the proper licensing and permits. In other cases, building materials with faulty performance or poor fire protection were used to construct the property.

Insurance companies also use this tactic to avoid paying for an insurance claim. The insurer may anticipate that the insured cannot provide sufficient proof to support their claim.

Tip: Get familiar with your home insurance policy and ask for legal representation when supporting your claim.


Insurance providers might deny a claim or pay less if the cause of the fire was due to property negligence.

As the insured, you must take preventative measures and reasonable precautions to limit the damage and loss to your insured property.

For example, your insurer might deny your claim if your kitchen caught fire after an accidental circumstance and you left the house to run errands.

This would not be taken seriously as you left the house, did not try to control the blaze, and did not call the emergency services. You must take reasonable steps to limit fire damage or contact emergency services as soon as possible, at the very least.

Suppose your fire alarms weren’t working, leading to a fire in the home. The faulty fire alarm could also lead to a fire insurance claim being rejected.

Tip: it’s especially important to ensure your fire alarms are working if they are included in your home insurance policy.

Damage disputes

Damage disputes can be tricky to resolve. Not every home policy covers damages that aren’t caused by the fire itself.

Even though fire indirectly causes smoke and water (to contain the fire) damages, some policies only cover damage caused by fire. This can lead to damage disputes, resulting in a rejected fire claim.

Suppose much of the damage to your home was caused by smoke. Your insurance provider may not fulfill your claim.

Tip: It's best to consult an insurance dispute attorney to understand and enforce your rights.

Valuation disputes

Another common reason insurance companies attempt to avoid paying fire insurance claims is by disputing the valuation. Also known as lacking supporting proof, valuation disputes are another tricky case to resolve.

The homeowner is responsible for documenting the value of their property during the fire claim process, including their belongings and all insured items.

If the homeowner cannot provide proof and verify the costs, they will likely not receive the requested compensation.

Suppose you claim the cost of what it will take to rebuild your home, but your insurance company suggests that it is worth much less than that. Your claim will be denied based on a valuation dispute.

While proving the actual value of your home can be tough, providing supporting proof can help.

It helps to have records from when your home was built, maintenance receipts, and before and after photos. All of this evidence will help your insurance dispute attorney with your claim.

If you have insufficient evidence, your fire insurance claim may be denied.

Tip: Don’t settle for your insurance company's first offer and get a second opinion if needed.

Missed insurance premiums

Lastly, the final reason insurance companies deny fire claims is due to missed premiums.

If you missed paying your premiums on time or didn’t pay your latest premiums, your insurance provider can deny your claim.

As the insured, you are obliged to pay your premiums on time. Your insurer could deny your fire claim if you did not meet this obligation.

Tip: Promptly pay your insurance premiums.

What can you do if your fire claim is denied?

You can challenge your insurance provider's decision to deny your fire claim. To do this, you must request that they reassess your claim.

If they validate your request, the insurance company will reassess the factors determining their previous decision.

Your insurance provider should reassess the situation quickly, especially during time-sensitive situations.

If your insurance company concludes that a mistaken oversight on their part caused the wrong decision, you may be eligible for compensation. However, the fire claim will remain denied if the insurance company comes to the same conclusion.

If you aren’t satisfied with the final outcome, you can ask for legal representation.

How to prevent fire claims from being denied

Several steps can help you minimize the likelihood of a denied fire claim. To summarize, here are tips to help support you.

  • Ensure you pay your premiums on time and follow the tips outlined above.
  • File the fire claim as soon as possible. This helps your insurance provider assess the situation efficiently. Know your time limits for filing a claim.
  • Fill out the necessary paperwork correctly and efficiently.
  • Document all loss and damage and file a detailed itemized claim to your insurer.
  • Know what your policy covers and excludes. You may want to buy additional coverage to cover flame, water, and smoke damage.
  • Following a loss, protect your property from further damage where possible.

Bottom line

With the tips in this guide and the knowledge about how to avoid common pitfalls, you can be confident in the fire claim process.

Knowing why insurance companies deny fire claims can help you make a successful one and protect your property should the worst happen.

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