8 Main Reasons Why Car Insurance Claims Are Denied – Being associated with a vehicle crash is demanding by itself, yet it is also worse if your car insurance coverage business denies your claim. When an insurer rejects to pay an automobile case, it is commonly for a legit factor, but not always. In instance you experience an insurance claim rejection, understanding why a case was denied– beginning with your claim rejection letter– as well as what to do if it happens is important.
Did you file a claim with the car insurance company and your claim was denied? Please read this article to learn the top eight reasons why insurance companies deny claims. If I can’t help you, I’ll try and find someone who can.
8 Main Reasons Why Car Insurance Claims Are Denied
OK, the first reason why an insurance company may deny your claim. Now this assumes that you file a claim with the insurance company for the driver who hits you, not your own insurance. So the bottom line is they’ve done an investigation into the accident.
They’ve interviewed their insured. Maybe you gave them a recorded statement. They’ve looked at the physical evidence, and they denied your claim. Well, if they deny your claim, because they assume that you are at fault for the accident, or that you’re liable for the accident and you disagree, what are your options? Well, you have two options.
One, if you only have property damaged, and if you have insurance coverage that covers your property damaged, you can file a claim with your own insurance to get the property damaged fixed.
But what if you have bodily injuries? What if you suffered pain and suffering, and you disagreed that you were at fault for the accident? Well, then your only option is really to file a lawsuit. Now I’ve talked about it on this channel many times.
If you’ve suffered very minor injuries or just property damage, chances are you don’t need a lawyer. But if you suffered moderate to severe injuries, I strongly recommend consulting with a personal injury attorney. If you need a referral to a personal injury attorney near you, reach out to me. I’ve got a nationwide network of lawyers and I’m happy to make an introduction. One last thought, it may be that the insurance company for the driver who hit you doesn’t find you totally at fault for the accident.
Maybe they say that their insured is 80% at fault and they put 20% of the fault on you. Well, what can you do? Well, I did a whole article on when you might wanna accept a little bit of percentage of fault for an accident.
OK, the second reason why a insurance claim might be denied. Now, this applies whether you filed a claim with the other guy’s insurance or with your own insurance. And that’s a situation when the insurance policy that you’re trying to claim from has lapsed. Aside from being denied because of liability reasons, a lapsed policy is the one thing that I see the most out of all the other reasons why insurance companies deny claims.
It’s amazing how many people let their insurance policies lapse. Maybe they didn’t get the notice in the mail. Maybe they just forgot to make a payment, whatever it is.
I strongly recommend you stay on top of your insurance payments because if the policy lapse, and is not in effect at the time of the accident, there’s not gonna be insurance coverage. And when I say at the time of the accident, I mean at the time of the accident.
I had somebody contact me on this channel, who got in an accident and his insurance policy had lapsed. Well, when he got home he realized, “oh my God, I hadn’t made a payment.” So he tried to make a payment after the accident occurred.
Just a couple of hours afterwards. But the insurance claim was still denied, why?
Because the policy was not in effect at the time of the accident. Okay, the third reason I see insurance claims get denied quite often, is that the claimant, the victim didn’t file a claim within a set standard period of time. Now, this is very common with those substandard insurance companies. The kind you see that are running advertisements at 12 o’clock at night, they’re often local insurance companies. They have very strict time periods to file a claim within 30 days of an accident happening or whatever it might be.
And if you don’t file within that set period of time, they’re going to deny your claim. Now this could apply to State Farm and Allstate too. That’s why I always encourage people. “Don’t delay, file a claim right away.” And even more so, file a claim with both insurance companies.
Yes, file a claim with the driver who hit you but also always file a claim with your insurance company too.
But it’s critical that you also file a claim right away with your own insurance company, so that you don’t miss those timelines as well.
OK, the fourth reason I see insurance claims denied, is that there’s fraud involved. Or the claimant lied to the insurance company.
Well, lying to the insurance company is the sure fire way to get a claim denied. And I’m talking about whether you’re gonna lie to the third party’s insurance company, or lying to your own insurance company. I can almost guarantee, if you lie about something to the insurance company, they’re gonna deny your claim. Now I’m not gonna go into the fraud issue.
I think we all can agree that there’s a huge amount of fraud in the insurance industry. I personally haven’t seen a lot of fraud and when I have seen it, which has been a couple of times in all these years of doing this, I haven’t gotten involved in those cases. So we’re not gonna talk about fraud, but I just want to reiterate “do not lie to the insurance company.” Hey, read on until the end of this article, because I’m gonna explain to you why you have to be careful what you say to an insurance company, all the way back when you sign up for your insurance policy.
OK, a fifth reason I’ve seen claims denied is that the person driving the vehicle at the time of the accident was an excluded driver.
What do I mean by that? Well, when you signed up for your insurance policy, you may have had a kid living in your house and that kid had a bad record. And so the insurance company in exchange for giving you an insurance policy specifically excluded that driver from being covered under the policy. That driver, your daughter or son was driving the car at the time of the accident, they are not gonna be covered when you file a claim with your own insurance company for those damages.
And there are other situations as well where drivers who are driving your vehicle at the time of an accident may be an excluded driver.
You really have to check your insurance policy to see who is and who is not a covered driver. And that’s why I always tell people after they get involved in an accident make sure you get a copy of your policy right away so you can read it for yourself.
OK, a sixth reason why I’ve seen insurance claims get denied, is that perhaps you were breaking the law at the time of the accident.
Now this is not a very common situation and I’m not talking about that you were speeding at the time of the accident. But let’s say for example, you have a history of driving while under the influence, and you got into an accident while you were drunk.
You may have a clause in your policy that specifies that if you were engaging in illegal activity, that you will not be covered under your insurance policy.
If that’s the case, I would again ask them to prove it to me. I would say, “show me in my policy where it says that.” But that is another situation where an insurance claim may be denied. I’ve also seen a lot of claims where drivers of Uber and DoorDash and Grubhub and Lyft and those kinds of folks.
They have their insurance claims with their own personal insurance denied because they were engaging in the commercial activity at the time of the accident.
That seems to be changing. And I just recently heard from State Farm on a policy that they were covering a driver even though they were driving for Uber at the time of the accident. So again, you have to check your policy whether you’re gonna be covered when engaging in a commercial activity.
OK, the seventh reason why an insurance claim may be denied, is that there’s not enough insurance policy to cover your damages.
So let’s take a hypothetical. Let’s say that you have a Mercedes-Benz that’s worth $80,000, and the guy who hits you has $15,000 in property damage insurance. Well, there’s a $65,000 difference there. The insurance company is only on the hook for what they contracted to insure and that would be $15,000. So in this case, where your claim wouldn’t be denied, you’d only be able to recover that $15,000 from their insurance company.
Now hopefully, you have a much larger insurance policy that you can tap into on your side as well. But that’s another reason why I’ve seen claims falter if not be denied.
OK, the eighth reason why an insurance claim may be denied goes all the way back to when you signed your insurance policy.
Maybe you didn’t tell the truth when you signed your insurance policy. So I guess this relates to the fraud in line that we talked about earlier in this article.
But you didn’t tell them that you had 16 year old kids living in the house at the time of the accident and they were gonna drive the vehicle. Or you made a misrepresentation about your driving record. Or you told them something that was false when you signed your insurance contract. I’ve seen insurance companies try to take that information and use it to deny claims. And by the way, this is not an exhaustive list.
An insurance company will try to deny your claim for any reason they possibly can. That’s what they’re in the business of doing delaying, denying and diminishing claims.
But those are my topic reasons why insurance companies deny claims. Okay, I mentioned earlier in the article that there were times when you may wanna accept a small percentage of fault for an accident.
All right, so now you have read about the 8 Main Reasons Why Car Insurance Claims Are Denied. What’s next? Give me a quick backup and let us know if you already understand the comments column below now.