Why Can a Car Insurance Claim be Denied?
Introduction:
Whenever you buy auto insurance in the USA, you expect to get full reimbursement in case of an accident. Unfortunately, you won’t always receive full reimbursement when filing a claim. Before delving into the reasons why your car insurance claim may be denied, let’s revise some basics:
What is a Car Insurance Claim?
Simply put, an insurance claim is a process whereby you inform your auto insurance provider of your involvement in an accident, clash, collision, or whatever case requires your insurer’s attention. Once you have filed the claim, the insurance company will start evaluating your benefits so as to provide reimbursements for the event.
An insurance claim is a prerequisite to gain access to your benefits – if someone hits your car, you would want your insurance provider to pay for the expenses, which is when you file a claim with them.
Let’s go through the list of things you need to have with yourself before you move on to file a claim:
- Names of people involved.
- Insurance Policy Number.
- One copy of the Police Report.
- Other Party’s Insurance Info.
- Accident Details.
Photographs and videos also help strengthen your claim; however, they are not mandatory. After submitting the claim, your insurance provider will initiate the inspection. They will assess the cause of the accident, the damages incurred to your vehicle, and other relevant pieces of information that require investigation. After accumulating all the necessary information, they decide whether to approve or deny your claim. A cheque that covers expenses according to your coverage will be given to you.
The circumstances are different if your claim is denied. Denial means the car insurance agency believes they are not liable to pay for any damages. You can obviously contest this decision by filing an appeal, or you can ask them directly if you suspect they don’t have any reason to reject your claim.
Reasons a Claim May Get Rejected:
As mentioned in the previous paragraph, your claims can get rejected, resulting in you getting absolutely no money to cover the damages. Now, you may be wondering when that happens. Well, we have compiled a list of possibilities for denied claims:
● Incomplete/Inadequate/Inaccurate Sharing of Information:
Every car insurance company in the US expects you to be completely honest during your application for car insurance. They expect you to give them a complete picture based on which they decide whether or not to reimburse you. You need to be blatantly honest in your claims, applications, etc., because your insurer relies on you completely for correct and authentic information. If you fail to follow this simple regulation, the insurance company will not accept your claim.
● Insufficient Coverage:
One needs to understand that once the cash value of your insurance policy has been depleted, your policy automatically slips into the “grace period.” Once that ends, your coverage lapses, meaning it will cease to provide any benefits. If you constantly do not pay your dues, all your cash value gets used up, and eventually, nothing is left to continue the policy.
If you let your policy lapse by recurrent non-payments or insufficient coverage, there is a high chance your claim will be denied. During this period, if you get involved in an accident, facing medical injuries and vehicle damage, your insurance provider will not pay for the medical costs and repair. Remember to review your coverage to ensure there are no gaps unfilled.
● Irresponsibility On The Driver’s End:
It is important to note that insurance claims do not approve your claim request if you are found to be reckless and irresponsible on the road. Negligence mainly includes driving while intoxicated, not safeguarding your car keys, or employing your vehicle for unlawful activities. Being a responsible driver and driving cautiously on the road can do more than you could imagine.
● Uninformed Modifications:
As a car owner, you may often like altering one thing or two in your vehicle to make it look more aesthetic or boost its performance. People are usually unaware that they may face a rejection for their claim if they do not inform their insurer regarding the modifications they make. Insurance coverage is provided after careful consideration of the car and the risks attached to it; some alterations may lead to reducing the safety of your vehicle or increasing other risks. Your insurer needs to be updated on all these changes as they play a big role in your coverage.
● Crossing the Policy Limits:
The policy limit is the level of assistance your insurance coverage can provide. If the damage costs exceed these limits, your insurance provider is not obliged to pay the full amount. In this situation, insurance companies usually pay some amount of money while leaving the exceeded quantity to be paid by the policyholder out of his pocket. In order to avoid ending up in such a situation, regularly check your policies to see if they align with your current circumstances and if they provide sufficient coverage from the possible risks.
● Fulfilling the Conditions:
Each car insurance policy that you buy is not unconditional, and there are certain specifications that you must meet to get your claim request to be accepted. Reporting your accident within a given time frame, submitting all the required documents, and complying with the investigation are a few examples of conditions, the disobedience of which may get your claim rejected.
You can simply avoid this by complying with the regulations you, the policyholder, and the insurer have set for yourself. Doing this ensures you are always financially supported during emergencies like accidents.
In Essence:
Grasping the “why” behind car insurance claim denials helps you avoid repeating the same mistakes twice. By understanding the causes of the denial of your car insurance, you can make better and wiser decisions in the future, reducing the chances of another claim getting rejected. Always act diligently in such matters as these decisions determine the quality of your future – stay informed, stay safe.
