When your homeowners insurance claim is denied, you have the right to appeal. According to the Insurance Information Institute (III), the average homeowners insurance claim is $17,000. Under Alabama law, insurers must investigate and respond to claims in good faith. Bad faith conduct can lead to additional damages.
Why Homeowners Insurance Claims Are Often Denied
You pay your premiums, and you do the paperwork. So why would an insurance company deny your claim? Insurance companies deny homeowners’ claims for many reasons. While some denials are legitimate, others may raise some eyebrows.
Common Reasons for Denial
| Reason for Denial | What It May Look Like |
|---|---|
| Policy exclusions | Damage from flood, earthquake, or other excluded perils |
| Late filing | Reporting the claim after the policy’s deadline |
| Insufficient documentation | Lack of photos, receipts, or repair estimates |
| Pre-existing damage | The insurer argues that the damage existed before the policy |
| Maintenance neglect | The insurer claims the homeowner failed to maintain the property |
| Policy lapse | Missed premium payments before the loss |
| Misrepresentation | Insurer accuses the homeowner of fraud or false statements |
| Coverage limits | Damage exceeds policy limits |
Legitimate vs. Unfair Denials
Some insurance claims denials are valid, like a claim for flood damage on a policy without flood coverage. However, others are questionable. They may claim “pre-existing damage” without evidence. Our homeowners insurance claims team helps homeowners challenge improper denials.
What to Do After Your Insurance Claim is Denied
- Request a written explanation. Ask the insurer to provide the specific policy language used to deny your claim. Written explanations are easier to challenge than verbal statements.
- Review your policy. Read the coverage, exclusions, and procedural requirements. Many disputes turn on specific policy language and how the insurer interprets it.
- Document everything. Photograph the damage from multiple angles. Save all communications with the insurer. Gather receipts, repair estimates, and contractor reports.
- File an internal appeal. Most policies include an internal appeals process. Submit a formal appeal with all supporting evidence and follow your policy’s required procedures.
- Consider a public adjuster. Public adjusters work for homeowners, not insurers. They advocate for a fair settlement. Some claims benefit from an independent damage assessment.
- File a complaint with the correct departments. For example, the Alabama Department of Insurance has a consumer complaint process. They also offer mediation services for homeowners’ insurance disputes.
- Then, consult an attorney if the insurer is being unreasonably difficult. They may deny your claim in bad faith or make a lowball offer.
Most homeowners’ insurance policies require prompt notice of loss and adherence to specific appeal deadlines. Missing deadlines can permanently bar your claim.
What Alabama Law Says About Insurance Bad Faith
Alabama law provides strong protections for homeowners facing improper denials. Alabama is one of the few states that recognizes bad faith insurance as a separate tort cause of action. This is not just a breach of contract. The Alabama Supreme Court established this in National Security Fire & Casualty Co. v. Bowen (1982).
Bad faith takes many different forms, including “normal” bad faith and “abnormal” bad faith.
Normal Bad Faith
When the insurer denies without a reasonable basis and knows there is no legitimate ground for denial.
Abnormal Bad Faith
When the insurer fails to investigate, ignores evidence, or relies on biased adjusters or experts to manufacture a denial.
Other Examples of Bad Faith
- Denying without conducting a reasonable investigation
- Misrepresenting policy provisions or coverage
- Failing to provide a written explanation
- Delaying payment without a reasonable basis
- Making lowball offers far below the claim’s value
- Pressuring policyholders to accept inadequate settlements
Successful bad faith claims can recover the original claim amount, attorney’s fees, mental anguish damages, and punitive damages. Our bad faith insurance team handles bad faith litigation.
When You Should Hire an Insurance Attorney
Some denials are resolved through internal appeals. Others require legal action. An experienced insurance attorney reviews your policy and identifies bad faith conduct. They gather evidence, file internal appeals, and file lawsuits when necessary.
If you’re experiencing any of these situations, you may need an attorney.
- The insurer denied your claim without a reasonable explanation
- The settlement offer is significantly below your actual loss
- The insurer is delaying payment without justification
- You suspect bad faith conduct
- Your claim involves significant property damage
- The insurer is misrepresenting policy language
- Your internal appeal was denied
Insurance companies know that experienced attorneys understand bad faith claims and Alabama’s unique framework. Many wrongful denials are reversed once the insurer realizes litigation is a real possibility.
Most plaintiff-side firms work on contingency. You pay nothing upfront. Instead, you only pay if your team wins a verdict or settlement in your favor.
Common Questions About Denied Insurance Claims
What should I do if my homeowners insurance claim is denied?
First, you should request a written explanation from the company that cites specific policy language. Then, you should review your policy and document all damages with photos and receipts. Then, you should file an internal appeal and a complaint with the Alabama Department of Insurance. Meet with an attorney if the denial appears improper.
Why would my homeowners insurance claim be denied in Alabama?
Many reasons could lead Alabama to deny your claim. Common examples include policy exclusions, late filing, alleged pre-existing damage, maintenance neglect, policy lapse, and more. Some denials are legitimate. Others may be improper.
What is the deadline to appeal a homeowner’s insurance claim denial in Alabama?
Your deadline varies by policy and claim type. For example, Ala. Code § 6-2-34 grants you six years to file a breach of contract lawsuit. But bad faith tort claims have a 2-year statute of limitations.
Most policies have specific deadlines for insurance claim denial appeals. The best thing you can do is to meet with an insurance claims attorney. They can help you understand your options and file an appeal.
What is bad faith insurance in Alabama?
Alabama recognizes bad faith insurance as a separate tort. The Alabama Supreme Court established this category in National Security Fire & Casualty Co. v. Bowen (1982). Bad faith occurs when an insurer denies, delays, or underpays a valid claim without a reasonable basis.
In a bad faith insurance claim, damages can include the claim amount, attorney’s fees, and punitive damages.
Should I hire a public adjuster or an attorney after a denied homeowners insurance claim?
A public adjuster is useful when the dispute is over the claim amount. They can help assess damage and negotiate for a fair settlement. However, an attorney is the better choice when the insurer denies the claim entirely or engages in bad faith. An attorney is also helpful when filing an appeal.
Can I sue my homeowners insurance company in Alabama?
Yes. If the insurer wrongfully denies, delays, or underpays a valid claim, you can file a lawsuit for breach of contract and/or bad faith. Alabama law allows you to recover the original claim amount, attorney’s fees, and punitive damages in bad faith cases.
What does an attorney cost when fighting a denied claim?
Most plaintiff-side firms, including Alexander Shunnarah Trial Attorneys, work on a contingency fee basis. This means you only pay if we win a settlement or verdict in your favor. Bad faith claims in Alabama may also allow recovery of attorney’s fees as part of damages.
Trust Alexander Shunnarah Trial Attorneys Today
A denied homeowners insurance claim isn’t the end of the road. Alabama law provides strong protections, including bad faith claims. Our Birmingham-based team has handled Alabama insurance disputes for more than 20 years. Schedule a free case review with one of our Alabama offices today.
Reviewed by Alexander Shunnarah, Attorney and Chief Executive Officer at Alexander Shunnarah Trial Attorneys on 2026-06-30.
