Pre-existing Damage As A Basis For An Insurance Claim
Generally, insurance companies do not pay out on policies if they determine that the covered property has pre-existing damage. The determination of the pre-existing damage is done through valuations and investigation by the insurance company.
Pre-existing damage to insured property does not always mean that the insured losses out on the claim completely. In some cases, the insurance company may only deny the part of the claim that has to do with what the insurance company considers pre-existing conditions. However, this may only be a small fraction of the loss suffered by the insured person.
However, just because the insurance company refuses a claim due to pre-existing damage does not mean you cannot challenge the finding. The insurance company’s definition of pre-existing damage can be challenged, as well as the kind of the damage that is included in a pre-existing damage exclusion clause in the policy. The insurance company’s denial can also be a tactic to delay or deny a claim, or as a tactic to force the insured into a settlement that is less than the amount that could have been paid under the policy.
Property owners, who have suffered damage to property that is insured and later try to make an insurance claim on the same property, may have a harder time proving that the damage is not pre-existing. For example, if John owns a house with an attached garage, and part of the garage is burned down in a fire. John makes a claim to his insurance company in order to repair the garage. If he fails to fix the garage completely, or fails to repair the garage to the condition it was in before, it could affect the amount he recovers if the garage is destroyed in another accident.
Property owners should also take steps to ensure that the property is well maintained and that all repairs and maintenance reports are maintained. This may help counter an insurance company’s denial based on the condition of the property. It can also help in countering an insurance company’s investigative conclusions about the nature of any pre-existing damage to the property.
It also helps for an insured person to routinely take pictures of the property in order to document the condition of the property before the damage.
The denial of an insurance claim based on pre-existing damage is also possible based on fraud. This happens when the insurance company claims that the insured person is making a knowingly false claim about the nature of the damage suffered. If a person knowingly makes a false claim about pre-existing damage in order to receive insurance benefits, this is insurance fraud, and is a criminal offense in Pennsylvania.
Contact Us for Legal Advice
If you have suffered a loss of property and your insurance company is denying your claim based on pre-existing damage, do not accept the denial or a lesser amount than the policy allows before talking to an experienced lawyer about how you can fight the denial. Contact our Philadelphia property loss claims denial lawyer at the law firm of Louis S. Schwartz, Attorneys at Law for more information.