Whether you got into a car accident or your house burns down, having your insurance claim denied is never ideal. When this happens, it can create a lot of emotional and financial stress. Unfortunately, your insurance company has the right to deny your claim if they feel it is justified. Claim denial is serious, and having your insurance claims denied can happen for a number of reasons.
Why would your insurance company deny your claim? Well, there are many reasons for your insurance company to deny your claim. It’s essential to keep in mind that one denial doesn’t mean that another claim won’t go through. With this in mind, let’s review why an insurance company can deny your claim and what to do if it happens.
Reasons your insurance company can deny your claim
A denied claim can happen from time to time. However, you should remember that insurance claims have to be covered by your specific policy, and you should not be violating any of those conditions. Your insurance company’s decision can have a massive impact on your life because a claim getting denied will force you to pay for everything out of pocket. Here are common reasons an insurance company can deny your claims:
Misrepresentation
When you file a claim, you need to provide all the information your insurer needs and update them about any changes. That’s because an insurer’s decision is based on honesty and truth, and if they believe you are providing false information, they have the right to deny your claim. We forget things every once in a while, and this isn’t a reason to deny your claim. However, deliberately withholding information like using your friend’s address or saying a vehicle is at the cottage to get a better price are grounds for claim denial. Honesty is the best way to get a claim experience letter approved.
When you purchase your home and auto insurance policies, ensure everything documented on your policy is accurate and up-to-date. For example, with car insurance, include the names of all drivers who operate or use your vehicle, annual kilometres, any previous damages, and customizations or modifications you have made. You should not misrepresent your insurance policy because it gives your insurer reasons to deny claims.
You violated your policy conditions
Every insurance policy has its own set of rules and regulations that have to be followed — these are called Statutory Conditions. If you break any of these rules and your insurance company finds out, your claims can be denied. Using personal auto insurance for a vehicle that’s being used for business or commercial purposes is a common misstep. In this scenario, your vehicle should only be for personal use because commercial vehicles are driven more frequently. In turn, they are more at risk for accidents and personal injury claims that can affect your insurance premiums.
If you use your vehicle for business reasons, that’s perfectly okay. All you need to do is inform your broker or insurance company to get commercial automobile insurance. This is also the case if you drive your vehicle for a rideshare service, such as Uber or Lyft. Having the right coverage will prevent your claim from getting denied and get you the coverage you need in the event of an accident. Just remember the number of car insurance claims you have per year can affect your rates.
Missing documentation
To process a claim, your insurance company will need all the necessary information surrounding the incident at hand. Certain documents may be necessary to get this done. These can include invoices or bills, medical reports, licences, evidence of the accident, and anything else relevant. If you don’t submit all of your documents, your claim is denied. Luckily, this isn’t a difficult issue to resolve. All you have to do is re-submit your claim with the proper documentation. If this happens to you, you can get compensated as long as your claim is submitted within the time frame outlined in the Statutory Conditions. Otherwise, you should cancel a personal injury claim, for example.
Your claim involves illegal activity
This one may seem quite obvious, but many people still try to submit claims that are somehow connected to criminal activity. Let’s use car insurance claims as an example here. If your vehicle is used for illegal activities without your knowledge, this is grounds for a claim to be denied. This might be a reason to cancel your car insurance claim before it goes through. Below are some examples:
- If you have received any convictions, criminal or not, within the past three years, your insurance broker must be aware of this. Any conviction stays on your driving record for three years from the date of the conviction; therefore, only convictions in the past three years are required to be disclosed.
- If you are convicted of using your vehicle while under the influence of alcohol or drugs, your claim may be denied. Driving while intoxicated or high is extremely illegal, as it puts every single person on the road at risk.
- If you are involved in any sort of accident and are caught driving with a suspended licence, your insurance company can deny your claim. In this circumstance, they can even cancel your policy altogether.
There’s more than one reason for an insurance claim denial. When this happens, you should carefully review your insurance policy to ensure you aren’t missing any exclusions. You should pass all the relevant information on to your insurance company. If you have done all those things, and your insurance company denies your claim, consider appealing or filing a lawsuit, which we will discuss shortly.
What to do if your insurance provider denies your claim
If your provider denies your insurance claim, there are a few measures you can take to overturn their decision. It’s essential to keep in mind that insurance coverage might not always be provided even if you go through the appeals process or take legal action. With that said, here are potential ways to get insurance coverage after your insurance claim gets denied for personal or business claim scenarios:
Going through the appeals process
The appeals process goes through your insurance company directly. To be clear, attempting to appeal your insurance company’s decision is not considered taking legal action. You should attempt to appeal a claim denial if:
- You provided incomplete or unclear medical evidence.
- You failed to provide additional documentation when requested.
- Information from your employer was inconsistent or not provided at all.
- You didn’t complete medical treatment or assessment requirements, but have since the claim.
- Insurance company approved doctors hadn’t examined you, but have since the claim.
If you choose to go through the appeals process, it’s important to have all the information you need on hand. Get in touch with your employer or doctor to get this information and attempt to overturn the claim denial. The sooner you supply your insurance company with what they need, the sooner the decision will be made.
Taking legal action against your insurance company
As a last resort, consider taking legal action against your insurance company. A wrongfully denied claim will not hold up in court if you gather the necessary evidence. Consider hiring a lawyer to help you through the process. This is best to do if the insurance provider terminates your benefits for any of the following reasons:
- Did meet deadlines or comply with time limits.
- Have pre-existing medical conditions.
- Received disability compensation from an excluded activity.
- Have a condition that does not meet the provider’s disability requirements.
- Can work part-time or on a modified basis because total disability stops you from working at all.
- Did not pass your medical assessment.
- Declined treatment or medical appointment made by the insurance company.
- Not seeing a doctor on a regular basis or receiving reasonable medical treatment.
Filing a lawsuit shouldn’t be your first idea when your insurance company denies your claim, but it’s sometimes necessary. For example, suppose you are denied long-term disability after receiving it for two years because you are working on a modified basis. In that case, your insurance provider cannot terminate your benefits. That’s because you can still get benefits if you cannot perform the essential duties of your job.
If you are denied after filing an insurance claim, you have options. You can either begin the appeals process or find an insurance lawyer and attempt to receive a lump sum payment. If you choose to go with the latter, make sure you have the evidence to back up your claims. Going to court and paying for the legal process can get expensive and might not be worth it for a small amount of money. With that said, we will explore how to avoid getting insurance claims denied in the future next.
How to avoid insurance claim denial in the future
There are many surefire ways to ensure your insurance claim goes through. All it takes is a little preparation. By taking the proper steps to gather evidence of the incident, your insurance company will provide compensation so you don’t have to pay for everything out of pocket. Here are some tips to get your next insurance claim approved:
Submit your claim on time
The majority of insurance companies have time limits on when you can submit a claim. In most cases, you have to make a claim within 30 days of the incident happening. If you don’t, you risk your claim getting denied. To avoid this, get everything together shortly after what happened and send it off to your insurance company as soon as possible.
Claim what you’re covered for
Did you know that most insurance policies have restrictions on what you can claim? There are often specifically excluded events or situations that you will not get coverage for. If your claim is denied and you get a denial letter, it might be because your policy does not cover what happened. Make sure to read the fine print before beginning the claims process.
Gather the required documents
Evidence is everything when making a claim, and most of the time, the reason an insurer denies a claim is because of missing documents. These can range from receipts to medical certificates, depending on the type of claim you’re making. A police report may also be required for an insurance claim. Paperwork not only shows what happened, but provides proof as well. Be aware of this because not submitting documents in a timely manner can cause trouble down the line.
By following these tips, your insurer is much more likely to approve your insurance claim in the future. It will allow you to receive the benefits and compensation you’re entitled to without issue. If your insurance claim still gets denied, contact your insurance company directly. You will then be given a reason for the denial. There could be a misunderstanding and your insurance claim might go through after all.
If you’re looking for a reliable insurance broker, reach out to BrokerLink!
If insurance denies your claim, you might start to worry. However, if you know what to do in this situation, you won’t have to worry. If you have to resort to an appeal or lawsuit, you can be prepared. However, it’s important to keep in mind that reaching out to your insurance company first makes the most sense because you will be given a reason for the denial.
Do you have questions about a recent claim of yours? Or do you simply have more questions about auto insurance? Get in touch with one of our licensed insurance professionals either online or in person.
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