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What are the most common reasons your home insurance claim will be denied?

Peter Terlato avatar
Peter Terlato
- 7 min read
What are the most common reasons your home insurance claim will be denied?

If disaster strikes and your property is damaged or destroyed, a home insurance policy can provide crucial coverage to aid repairs and rebuilding. However, there are circumstances in which an insurer may reject a claim. In this guide, we’ll explore and explain the most common reasons a home insurance claim might be denied.

Being informed about these factors can help you make sensible decisions when you’re considering filing a claim, and ensure that you're adequately covered.

Non-disclosure of relevant information

One of the most common reasons for claim denials in Australia is non-disclosure of relevant information when purchasing an insurance policy. When you apply for home insurance, you are required to provide accurate and complete information about your property and its contents. Failure to disclose material information, such as previous claims, property modifications, or unapproved construction work, can lead to your claim being denied. It's essential to be upfront with your insurer and update them whenever there are changes to your property.


This can occur when the insured property is not adequately covered by the insurance policy. If your property's value is underestimated, your insurer may deny your claim or only partially cover the loss. To avoid underinsurance, it’s helpful to regularly review and update your policy to reflect the current value of your property. Seek professional guidance or use online calculators to determine the appropriate coverage.

Lack of evidence

When filing a claim, it's essential to provide sufficient evidence to support your case. This may include photographs, receipts, repair estimates, and any other documentation relevant to your claim. Failure to provide adequate evidence can result in claim denials or delays in processing your claim.

The more information and evidence you can provide, the more comprehensive and credible your claim will be.

Failure to maintain the property

Home insurance policies often require homeowners to maintain their properties in good condition. Neglecting regular maintenance, such as fixing leaks, repairing structural damage, or keeping the property secure, may lead to claim denials. Insurers expect homeowners to take reasonable precautions to prevent damage and protect their property.

Policy exclusions

Home insurance policies often include specific exclusions that dictate what is not covered. These exclusions can vary between insurers, but common examples include damage caused by pests, gradual wear and tear, and damage caused by actions of the homeowner.

Read your policy documents carefully to understand what’s included and consider adding extra coverage if necessary.

Delayed reporting

Promptly reporting a claim is essential. Delays in reporting incidents can result in claim denials, as insurers may argue that you failed to fulfil your obligation to notify them in a timely manner. Report any incidents, such as theft, vandalism, or damage to your property, as soon as they occur.

Additionally, if you begin repairs on damaged property before getting the go-ahead from your insurer you may void your claim entirely. Generally, you’ll need to get permission before committing to any works.

Unapproved renovations

Making renovations or modifications to your home without obtaining the necessary approvals or permits can lead to claim denials. If an unapproved renovation causes damage, your insurer may consider it a breach of the policy terms. Always ensure that your property modifications comply with local regulations and you obtain the required permits.

Overdue premium payments

Failing to pay your insurance premiums on time can lead to a lapse in coverage, making you ineligible to file a claim. Ensure that you keep up with your premium payments to maintain continuous coverage.

Acts of terrorism

Most standard home insurance policies do not cover damage caused by acts of terrorism. If your claim is related to such an event, it will typically be denied. In some cases, you can purchase separate terrorism insurance if you are concerned about this risk.

Acts of god

Certain natural disasters or "acts of god", such as earthquakes, may not be covered by standard home insurance policies. If you live in an area prone to such events, consider purchasing additional coverage or a separate earthquake insurance policy.

Flooding and water damage

Flood damage is a common exclusion in many home insurance policies. If your property is located in a flood-prone area, consider purchasing separate flood insurance. Additionally, damage caused by poor maintenance of plumbing, such as leaky pipes, may not be covered, so ensure your plumbing is in good working order.

Vacant or unoccupied properties

Some home insurance policies have restrictions or exclusions for vacant or unoccupied properties. If you leave your property vacant for an extended period, be sure to check your policy terms and notify your insurer. Failing to do so can lead to claim denials.

Inadequate security measures

Failure to implement adequate security measures can result in claim denials in cases of theft or burglary. Some insurers may require specific security measures, such as deadbolt locks, alarm systems, or security cameras, to be in place to validate your claim. Check your policy for details.

What happens if you file a claim and it’s denied?

If you file a home insurance claim and it ends up being refused, you won’t be on the hook for extra charges or increased premiums

However, as part of the claims process an insurer may send an adjuster to inspect and assess the damage and loss to the insured property. As part of their investigation, an adjuster may discover discrepancies that could impact the risk tolerance of the insurer. Although your claim may be rejected, your policy may be reevaluated and your level of coverage and/or premiums amended to reflect these observed changes.

This is why it’s vital to inform your insurer of any changes in circumstances as soon as possible to avoid any issues.

1. Review the denial letter

Carefully examine the denial letter or notice provided by your insurer. This document should outline the reasons for the denial, which will help you understand why your claim was rejected, according to Aussie insurance regulations.

2. Contact your insurer

Get in touch with your insurance company to discuss the denial and seek clarification on the reasons provided. Insurers are generally required to provide a clear explanation for the denial, allowing you to address any potential misunderstandings or miscommunications.

3. Seek a second opinion

You have the option to consult with a public adjuster or a legal professional specialising in insurance claims to seek a second opinion. They can provide guidance on your rights and options under Australian insurance laws.

4. File an appeal

Many insurance companies have an established appeals process. If you believe your claim was unfairly denied, you can formally appeal the decision, which may involve presenting additional evidence to support your case.

5. Consider mediation

Mediation is an option for dispute resolution. A neutral third party can assist in facilitating negotiations between you and your insurer, helping to reach a fair settlement.

7. Review your policy

Revisit your insurance policy and ensure that you've adhered to all the requirements and obligations outlined within the policy terms. If you find a discrepancy you may be able to challenge the decision. 

8. Learn and improve

Use the experience of a denied claim as an opportunity to enhance your understanding of the insurance landscape. Update your property inventory, maintain records diligently, and take preventive measures to minimise the risk of future claim denials.

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Product database updated 16 Jun, 2024

This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.