Did you file a claim with your car insurance company and have it denied? Learn the top eight reasons why insurance companies deny claims in this short article.
Insurance Claim Denied Due to Your Fault in the Accident
The first reason an insurance company may deny your claim (assuming you file a claim against the driver who hit you) is that they may have determined you were at fault for the accident.
They interviewed their insured, possibly took a recorded statement from you, analysed the physical evidence, and denied your claim.
So, what are your options if they deny your claim because they believe you are at fault for the accident or that you are “liable” for the accident and you disagree?
So you have two choices. To begin, if you only have property damage and have insurance coverage that covers it, you can file a claim with your own insurance to have the property damage repaired.
But what if you’ve been injured physically? What if you were injured and disagreed that you were at fault for the accident? Then you really only have one option: file a lawsuit.
If you’ve only suffered minor injuries or property damage, you probably don’t need a lawyer. However, if you sustained moderate to severe injuries, we strongly advise you to consult with a personal injury attorney.
Insurance Claim Denied Due to Policy Lapse
The second reason for an insurance claim denial applies whether you filed a claim with the other person’s insurance or your own.
That occurs when the insurance policy from which you are attempting to make a claim has expired. Out of all the other reasons why insurance companies deny claims, denial due to a lapsed policy is the one that I see the most of.
Perhaps you forgot to make a payment or the bill was misplaced in the mail. It makes no difference. Maintain your insurance payments because there will be no insurance if the policy lapses and is not in effect at the time of the accident.
Insurance claim denied due to missed deadline
The third reason I see insurance claims denied is that the claimant did not file a claim within a certain time frame.
This is very common with poor-quality insurance companies. The kind you see running commercials at 12 o’clock at night. Local insurance companies are frequently involved.
They have very strict time limits, such as filing a claim within 30 days of an accident occurring. If you do not file within that time frame, your claim will be denied.
Yes, you should file a claim with the driver who hit you, but you should also file a claim with your insurance company.
Insurance Claim Rejected Because of Fraud or Lying to the Insurance Company
The fourth reason insurance claims denied is fraud or the claimant lying to the insurance company.
Lying to the insurance company is a sure way to have your claim denied. This includes lying to your insurance company or the other guy’s insurance company.
Insurance Claim Rejected Due to Excluded Driver
A fifth reason I’ve seen claims denied is because the driver at the time of the accident was an excluded driver. What exactly do I mean? So, when you signed up for your insurance policy, you might have had a child living in her home with a bad driving record.
So, in exchange for providing you with insurance, the insurance company specifically excluded that driver from coverage. If the excluded driver was driving the car at the time of the accident, they will not be covered if you file a claim for those damages with your own insurance company.
There are other circumstances in which drivers who are driving your vehicle at the time of the accident may be excluded. You must thoroughly review your insurance policy to determine who is and is not a covered driver.
Insurance Claim Rejected Due to Illegal Activity
A sixth reason I’ve seen insurance claims denied is that you may have violated the law at the time of the accident.
This is not a common occurrence, and I’m not talking about speeding at the time of the accident. However, if you have a history of driving while intoxicated and were in an accident while intoxicated, you may have a clause in your policy that states that if you were engaging in illegal activity, you will not be covered under your insurance policy.
There are lot of claims where Uber, DoorDash, GrubHub, and Lyft drivers had their insurance claims with their own personal insurance denied because they were engaged in commercial activity at the time of the accident.
So you must check your policy to see if you are covered when engaging in commercial activity.
Inadequate Insurance to Cover Your Losses
The seventh reason an insurance claim may be denied is that there is insufficient insurance coverage to cover your damages.
Consider the following scenario. Assume you own a $80,000 Mercedes-Benz and the person who hits you has $15,000 in property damage insurance. Well, that’s a $65,000 difference. The insurance company is only liable for the amount they agreed to insure, which is $15,000. So, while your claim would not be denied in this case, you would only be able to recover $15,000 from their insurance company.
Claim denied due to false information provided when the insurance contract was signed
The eighth reason for an insurance claim denial dates back to the time you signed your insurance policy. Perhaps the driver lied when they signed their insurance policy.
Perhaps the driver failed to inform that they had 16-year-old children living in the house at the time of the accident and intended to drive the vehicle. Perhaps the driver misrepresented their driving record, or they said something else that was false.
Insurance companies attempt to use that information to deny claims.