Let’s talk about an essential aspect of every car owner’s life — car insurance, and more precisely, discuss why an insurance claim can be denied. We’ll also cover the things you can do if the insurance company denies your claim.
Major Reasons for Rejection of Car Insurance Claims
If your claim gets denied, you will get a rejection letter stating why your car insurance will not pay out. Luckily for you, you don’t have to accept this as a final judgment and can challenge the reasons for denial of the claim. The rejections often happen due to the lack of supported facts.
Let’s discuss the most common reasons why a car insurance claim can be denied.
Reason 1: Car Accident Damage Due to Drunk Driving
If you get into an accident while driving under the influence of alcohol or drugs, the car insurance company will most probably deny your claim. However, if you don’t tell the insurance agent about DUI, you risk getting into more considerable trouble.
Wondering whether there are any exceptions? Yes, but it’s tricky, as you will have to prove that you were not under the influence of alcohol or drugs, or in other words, you will be guilty until proven innocent.
Reason 2: The Driver Who Caused the Accident Doesn’t Have Insurance
Should you get in a car accident with an uninsured motorist, your car insurance may refuse to pay the claim. Another reason the car insurer will not pay out is during the hit and run situation.
Reason 3: An At-Fault Driver’s Insurer Denied Your Claim
When another driver is at fault for the accident, their auto insurance may deny the claim. There could be several reasons: a lack of coverage or providing incorrect insurance details.
Reason 4: You Did Not File Your Claim on Time
In the unfortunate case of getting into an accident, first, find help for all injured people as soon as possible. Next, inform the police, take pictures with your phone, call the insurance agency, and notify them of the accident. Should you fail to report the accident in the allotted time, your car insurance claim will get denied.
Reason 5: Your Claim Was Denied in Bad Faith
To be denied an insurance claim in bad faith means the insurance agency lacks adequate evidence to make a proper decision. You have a ground to appeal if this happens.
Reason 6: You Did Not Submit Proof of Your Losses
Proof of loss should support your request for a car insurance claim, and should you forgo supplying it, the claim will probably get denied. Proof of loss can be a medical bill, a car repair bill, a police complaint report, and similar documents.
Reason 7: The Condition of Your Vehicle Played a Role in the Accident
A car insurance claim will be denied if you drive a faulty vehicle or use your vehicle for purposes not stated in the insurance policy. In addition, if you have been negligent with your car or made modifications that you’ve not reported to the DMV, you are risking getting your car insurance claim denied.
Reason 8: You Made False Statements When Filing Your Claim
All auto insurance claims should have the correct information. If you mistakenly or purposefully enter false information, your claim will be denied, and you can also be found guilty of misrepresentation. It is illegal to lie on your car insurance claim. However, if you make a small mistake, like entering an incorrect birth date, it can be easily fixed.
Reason 9: You Have Not Done Everything Necessary to Protect Your Legal Rights
In the case of having your insurance claim denied, you have the option to file a suit against the insurance company. You can sue them for bad faith insurance practices, breach of contract, violations of your state’s insurance code, and more.
Reason 10: You Have Not Responded to Requests for Information About Your Claim
When filing an insurance claim, you will be asked to submit supporting evidence to your claim during a specific time frame. Your car insurance claim will probably be denied if you fail to respond to this request on time.
What to Do When Your Insurance Claim Is Denied
- Gather evidence: Review all documentation provided by the insurance company and gather the evidence you need to appeal, like police reports, eyewitness testimonials, photographs, medical reports, and the like. Make copies of everything to provide to the insurance company and keep the originals.
- Draft an appeal letter: It will explain why you disagree with the insurance company’s decision. Make sure you explain why each piece of evidence was provided, such as any police and medical reports. Provide as much detail as possible, referencing policy information and the claims denial letter.
- Consult/hire an attorney: In many cases, you will need legal advice, and an attorney can help review the case, check your supporting documents, and help draft a proper appeal letter requiring a response from the insurance company.
In Conclusion
While many insurance claim denials are valid, generally, insurance companies will do everything in their power to deny a claim and save money.
Now that you know the top most common reasons why this happens, you can take all necessary steps to prevent your car insurance request from being denied.
