Nuisance Claim

What Does Nuisance Claim Mean?

A nuisance claim is an insurance claim that an adjuster deems not worth pursuing, either because the claim is misguided, involves the wrong parties, or does not involve an insurable event.

Insurance companies rarely issue payment for claims classified as nuisance claims. However, the insured individual whose claim has been denied can still appeal if they believe the nuisance label is unjustified.

Insuranceopedia Explains Nuisance Claim

There are several reasons an adjuster might classify a claim as a nuisance, including:

• The insurer is not responsible for compensating the loss (e.g. when a party other than the insured is at fault)
• The losses were not caused by an insured event
• The reported losses were either not incurred or not significant enough to be deemed compensable

Fault is often the deciding factor in the first scenario, which is why how much liability coverage you carry can affect whether a claim against your policy is paid out or dismissed.

A nuisance claim differs from a claim for which no payment is issued. In some cases, a claim may be deemed legitimate and proper, but due to exclusions, deductibles, or other features of the insurance contract, the claimant may have their claim denied without it being labeled a nuisance claim.

Occasionally, insurance companies opt to avoid the hassle of nuisance claims by offering the insured a nuisance value. This is a small settlement designed to placate the insured and discourage them from causing further work for the company’s adjusters. The willingness to pay nuisance value versus fight a claim outright varies widely between carriers, and it’s one of the things to look at when comparing how insurers handle disputed claims.