What Does Nuisance Claim Mean?
A nuisance claim is an insurance claim that an insurance adjuster has deemed not worth dealing with, either because the claim is misguided, involves the wrong parties, or does not involve an insurable event.
Insurance companies will rarely issue payment for claims that are deemed nuisance claims. The insured whose claim has been denied can, however, still appeal it if they believe the nuisance label is unwarranted.
Insuranceopedia Explains Nuisance Claim
There are a number of reasons that an adjuster might classify a claim as a nuisance. These include:
- The insurer is not responsible for compensating the loss (for example, when a party other than the insured is at fault)
- The losses were not caused by an insured event
- The reported losses were not incurred or were not sufficient to be deemed compensable
A nuisance claim is different than a claim for which no payment is issued. In some cases, the claim is deemed legitimate and proper, but due to exclusions, deductibles, and other features of the insurance contract, the claimant will have their claim denied without it being deemed a nuisance claim.
Insurance companies occasionally decide not to deal with the hassle involved in nuisance claims by paying the insured a nuisance value. This is, essentially, a small settlement meant to placate the insured and discourage them from making further work for the company's adjusters.