Denied Fire Insurance Claim? Here’s What to Do Next

Few things are more devastating than watching your home or business go up in flames. 

Whether it's a small kitchen fire or a raging wildfire that forces you to evacuate, the destruction left behind can be overwhelming. By default, you turn to your insurance company for help. After all, that’s why you’ve been paying premiums for years, but then, the unthinkable happens: your fire insurance claim is denied.

Unfortunately, this isn’t uncommon. Every year, countless homeowners and business owners across the country find their legitimate fire insurance claims denied, delayed, or underpaid. 

If you’re one of them, you’re not alone, and you’re not powerless. At Morgan & Morgan, we help people like you fight back.

To learn more about your legal options, contact Morgan & Morgan for a free case evaluation.

 

Common Reasons Fire Insurance Claims Are Denied

Insurance companies often use vague or complex policy language to justify a denial. Here are the most common reasons cited:

Claimed Damage Isn’t Covered by the Policy

Sometimes the damage caused by a fire includes more than just flames. Smoke damage, water damage from firefighters, or destruction to landscaping might not be covered unless your policy specifies it. If your insurer claims certain types of damage aren’t covered, it's essential to review your policy with an expert.

Alleged Policy Lapse or Cancellation

Insurers may claim that your policy lapsed due to non-payment or other administrative issues. Sometimes these are errors; other times, the company failed to properly notify you of cancellation.

Suspicion of Arson or Fraud

If the insurer suspects that the fire was set intentionally, especially in the case of financial hardship, they may deny the claim pending investigation. These allegations can be deeply upsetting and require legal representation to resolve.

Delayed Reporting or Filing

Insurers often impose strict deadlines for reporting and documenting a loss. Even if you're dealing with trauma or displacement, a delay in filing your claim could give them grounds to deny it.

Insufficient Documentation

If you didn’t properly document the fire damage with photos, videos, or a detailed inventory of losses, the insurer may say there's not enough proof to approve the claim.

Disputes Over Valuation

Sometimes insurers acknowledge the damage but offer a much lower payout than you expected. This may not be a full denial, but it’s still a form of underpayment.

Pre-existing Damage or Poor Maintenance

If the insurer argues that part of the damage was due to pre-existing conditions, like faulty wiring, neglect, or code violations, they might use that as an excuse to deny your claim.

What to Do Immediately After an Insurance Claim Denial

A denial isn’t the end of the road. Here’s what to do next:

1. Don’t Panic

It's easy to feel overwhelmed or angry, but stay calm. Many denials are reversible, especially when you understand your rights and get proper legal help.

2. Request a Written Explanation

Under the law, your insurance company must provide a written denial that explains its reasoning. This letter should cite specific clauses in your policy and the evidence they’re relying on.

3. Review Your Policy Carefully

Locate your original policy documents and read through the coverage terms, exclusions, and conditions. Pay special attention to:

• Fire and smoke coverage
• Personal belongings
• Additional living expenses (ALE)
• Policy limits and deductibles
• Filing deadlines and appeal procedures

This helps you understand whether the denial was justified or questionable.

4. Gather Documentation

Start building your case:

• Take photos of the damage (if you haven’t already)
• Collect receipts, appraisals, or inventory lists
• Save all correspondence with your insurance company
• Get a copy of the fire report from local authorities
• Request an independent contractor’s repair estimate
  
   

5. Track All Expenses

If you're displaced due to the fire, track your out-of-pocket expenses: hotel stays, food, transportation, laundry, and more. These may be reimbursable under ALE provisions.

How to Appeal a Denied Fire Insurance Claim

Most insurance companies have internal processes for appeal. Here’s how to approach it:

Step 1: File a Formal Appeal

Send a written appeal letter to your insurer that:

• Clearly states your disagreement with the denial
• Points to specific policy language supporting your claim
• Includes new evidence (photos, reports, receipts)
• Requests a full and fair re-evaluation

Send the letter via certified mail and keep a copy for your records.

Step 2: Get a Second Opinion

Hire an independent public adjuster or contractor to assess the damage. Their professional opinion can carry weight if your insurer lowballed the estimate or ignored significant losses.

Step 3: File a Complaint With Your State’s Insurance Department

Every state has a Department of Insurance that regulates insurance companies. If you believe your claim was wrongly denied or handled in bad faith, file a complaint. While this doesn’t guarantee payment, it adds pressure on the insurer to act ethically.

Special Considerations for Wildfires

Large-scale wildfires, like those that sweep through California, Colorado, and other parts of the West, pose unique challenges.

Mass Damage, Delayed Help

When thousands of claims are filed at once, insurers may be slow to respond. Some even become overwhelmed and default to blanket denials to reduce payouts.

Complex Coverage Issues

Wildfires often destroy entire neighborhoods, which complicates valuation and debris removal. Smoke and ash damage can impact homes not directly touched by fire, leading to disputes over whether losses are compensable.

Government Aid vs. Insurance

FEMA and other agencies may offer assistance, but this does not replace what your private insurer owes you under your policy. Don't let insurers push you toward federal relief instead of fulfilling their legal obligations.

Utility Company Liability

In some wildfire cases, faulty equipment or negligence by power companies (like PG&E in California) may have caused or worsened the disaster. In those cases, victims may have legal claims against third parties in addition to their insurer.

What Is Bad Faith Insurance?

When insurance companies intentionally delay, deny, or underpay valid claims without reasonable cause, that’s called bad faith, and it’s illegal.

Examples of bad faith include:

• Misrepresenting policy terms
• Delaying communication or payment without cause
• Failing to conduct a proper investigation
• Intentionally undervaluing losses
• Threatening or intimidating policyholders

If you suspect your insurer is acting in bad faith, legal action may be necessary.

When to Hire a Fire Insurance Attorney

If your appeal is denied or the insurance company refuses to negotiate fairly, it's time to bring in legal help. A fire insurance attorney can review your policy and explain your rights, gather expert evidence and documentation, and negotiate with the insurer on your behalf. Your attorney can even file a lawsuit if necessary to get compensation.

At Morgan & Morgan, we’ve recovered billions for people mistreated by their insurers. We work on a contingency basis, meaning you don’t pay unless we win.

When your home burns down, you shouldn’t have to fight your insurance company. At Morgan & Morgan, we believe in holding insurers accountable. We handle fire damage cases involving:

• Denied or delayed claims
• Underpaid settlements
• Wildfire-related losses
• Allegations of arson
• Bad faith conduct

We’ll review your case for free and help you understand your options. If we take your case, we’ll build a strong claim backed by experts and negotiate aggressively on your behalf. And if necessary, we’ll take your case to court.

What You Could Recover

Depending on your policy and the circumstances of your fire, you may be entitled to:

• Full replacement cost for your home or structure
• Personal property losses (furniture, clothing, electronics)
• Smoke, soot, and water damage remediation
• Temporary housing and relocation expenses
• Emotional distress or punitive damages (in cases of bad faith)
• Legal fees
  
   

Contact Morgan & Morgan to Fight Back

Being denied after a devastating fire can feel like a second trauma. But you have rights and options. 

At Morgan & Morgan, we fight For the People, not powerful insurance companies. Whether your fire was caused by a faulty appliance, an act of nature, or a massive wildfire, we’re here to help you rebuild. Our attorneys are ready to step in, challenge unfair denials, and recover what you’re owed.

If your fire insurance claim was denied, don’t wait. Contact us today for a free case evaluation.