Compensation for a house or apartment fire should provide the owner with compensation for their losses, but in practice, obtaining full compensation is often fraught with difficulties. Insurance companies employ various legal loopholes that can result in reduced compensation or even complete denial of payment. Below, we present the most common pitfalls to watch out for.
1. Failure to fulfill obligations by the owner
One of the most common reasons for denial of compensation is the property owner's failure to adhere to safety regulations. Insurers may require regular inspections of electrical and chimney systems. If the owner fails to meet these obligations, the insurance company may deem gross negligence and deny coverage, for example, for a building fire caused by a faulty chimney. Some policies also require the possession of a fire extinguisher or smoke detectors; failure to do so may result in a reduced claim.
2. Providing false information in the policy
When taking out an insurance policy, the owner must provide accurate information about the property. If it turns out, for example, that the home's value has been underestimated or significant risks (e.g., running a business in the building) have not been reported, the insurer may refuse to pay out or significantly reduce the amount.
3. Underestimated value of compensation
It's common practice for insurance companies to use depreciation when calculating compensation. If the policy is based on the so-called actual replacement value, this means the insurer will take into account wear and tear of the building and its components, which can significantly reduce the payout. To avoid this trap, it's worth taking out a full replacement value , which will cover the cost of rebuilding the house at current prices.
4. Disclaimers
Not all fire damage is compensable. An insurer may refuse to pay if the fire was caused by gross negligence, such as leaving a lit candle unattended. Some policies also exclude liability for natural disasters, such as earthquakes.
5. Problems with damage documentation
To apply for compensation, the owner must provide the appropriate documentation, including a fire department report, photos of the damage, and a repair estimate. Failure to provide complete documentation may result in delays or a reduced compensation amount. It's important to gather all the required evidence immediately after the fire.
6. Delays in payment of compensation
Insurers often extend the case review process by requesting additional documents or expert opinions. It's worth remembering that, according to regulations, the insurance company has 30 days from the date of reporting the loss to pay compensation. In complex cases, this deadline may be extended to 90 days , but the company is required to pay the undisputed portion of the compensation within the initial deadline.
How to protect yourself?
To avoid problems with compensation, it's important to carefully read the general insurance terms and conditions (GTC) before signing the contract. You should also regularly conduct technical inspections of your home and collect proof of these inspections.
For more information, please contact us. We will assist you at every stage of the process to obtain the compensation you deserve.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of February 4, 2025
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