Claim Denial
Definition:
When an insurance company refuses to pay for a reported loss.
Explanation:
Denials can occur for many reasons, such as exclusions in the policy, lack of coverage, or insufficient documentation. Policyholders can dispute denials through appeal, appraisal, or legal action.
Example:
If your insurer denies a water damage claim by saying it was due to long-term leakage rather than a sudden event, that is a claim denial.
Why it matters:
This term affects how claims are handled and what payout a homeowner may receive.