Most Well-Known Reasons Why An Auto Insurance Denies A Claim

After an accident, an auto insurance policyholder can file a claim to the insurance company to request compensation for damage. Filing a claim is very beneficial when one out-of-pocket cost exceeds the policy’s deductible and will aid pay for the property damage, medical expenses, loss of salary due to missed work, and even legal fees, depending on one’s coverage.

Always read through your policy or contact your insurance agent or provider to understand exactly what’s covered under your plan. We will be exploring in the article the reasons why auto insurance denies a claim, how to handle auto insurance denied claim etc.

What Are Auto Insurance Claims?

An auto insurance claim is a request for reimbursement from an insurance company/insurance provider for the costs of damage or any injury in a car accident.

There are types of car insurance coverage that address different types of incidents. You can’t be able to file a claim unless you have coverage for that specific incident in question. These are the Common coverages:

Liability insurance: This covers damage to an individual from accidents that they are at fault for. The Liability insurance covers both the bodily injury (BI) or any physical harm to another driver or passenger and also property damage (PD), such as a vehicle or structural damage.

The Personal injury protection (PIP) & Medical Payments (MedPay): this coverage offers reimbursement for bodily injury for the costs of harm to your passengers and yourself in an accident, not minding who was at fault. PIP also covers lost wages due to missed work.

Comprehensive and collision insurance: this covers damage to your car. The Comprehensive insurance covers damage from ‘acts of god’ or events that are outside the driver’s control, like vandalism, impact with an animal, theft, or a tree branch hitting your windshield. Collision covers damages from accidents while driving regardless of who was at fault, such as crashing into a tree or another car.

The Uninsured & underinsured motorist coverage: this coverage is similar to that of liability insurance, but this covers for accidents involving an uninsured and at-fault or underinsured driver. When is the other driver is at fault, you would file a claim with their insurance company provider.

When the at-fault driver is uninsured, your uninsured motorist insurance provider will cover your bodily injury and property damage. Likewise, if the at-fault driver has insufficient insurance to cover your expenses, your underinsured motorist coverage would pay for the remaining damage.

Full coverage: this coverage includes all of the types of coverage listed above.

Seven Common Reasons Why an Auto Insurance Denies a Claim

Below are 7 outlined reasons why auto insurance denies a claim: auto insurance denies a claim when the following happens:

Your Vehicle Is in Need of Maintenance or Repair

If your vehicle was not in good condition, the insurance company may argue that the car should not have been on the road. In this case, you will be left to prove that the condition of your vehicle was not a factor in causing your collision.

You Driving Under the Influence of Alcohol

Driving under the influence of alcohol is dangerous, and it is a justification for any insurance companies to deny coverage for car accident injuries. However, this is justifiable if your impairment was the factor in your collision. But in the case whereby you got hit while waiting at a red light, your impairment might be entirely irrelevant to your claim for coverage.

You Were Driving Without Your Glasses

Driving without wearing glasses on could lead to an auto insurance claim denial if you need to wear glasses when you drive.

You Made False Statements When Filing Your Insurance Claim

If you made any false statements when you were filing your insurance claim, this could form the basis for an insurance coverage denial as well.

You Did Not File Your Insurance Claim in Time

Waiting too long to file an insurance claim is also a mistake that can deny you your insurance coverage.

How to Handle a Denial Insurance Claim

Here are a few basic pointers for handling denied insurance claims:

  • Carefully Review All Notifications Regarding the Claim

This is one of the most important steps in claims processing. When you receive an explanation of benefits, remittance advice, or other notification from any insurance company regarding a claim, kindly review it carefully.

The notification will indicate if a claim was paid in full, partially paid, delayed, or denied. If the claim is seen to be “unclean” or contested, follow the company’s instructions for resubmitting the claim along with any missing or corrected information. If the claim is partially paid for or if the payment is denied, the notification will specify the reasons and state out the specific procedures and documentation you will be needing to resubmit the claim or file an appeal.

If the notification is not clear to you, call the carrier for more detailed information. In addition, to obtain a stated reason for denying a claim, you might find out that the claim was judged incorrectly because of an administrative error on the payer’s side. You might also find out that your submission procedures do not match that of the company’s requirements, but you can still make some simple adjustments to your procedures to streamline your future claims submissions.

  • Be Persistent

If the resubmitted claim is denied and you are sure the denial was improper, you can appeal the decision according to the carrier’s guidelines. Ensure that you know exactly the information you need to submit along with your appeal. Keep in mind that appeal procedures might vary by the insurance company and also state law.

The appeal should include an explanation of your reconsideration request, alongside any other necessary supporting documentation, such as a copy of the claim in question and also copies of earlier/previous communication to the insurance company about the matter.

You may need to resubmit the claim or even file an appeal more than once to reverse the company’s decision; Your persistence can demonstrate to the provider that you are serious about resolving the problem and also getting paid if you do not give up.

  • Don’t Delay

It is essential that you submit and resubmit claims in a timely manner, within the company specified timeframe or the applicable laws in your state else, the claim may be adjudicated/judged based only on the information you already provided, or any requests for appeal or reconsideration may be denied as untimely.

  • Get to Know the Appeals Process

When submitting an appeal, make sure you are familiar with the insurance company appeals process. When you know your carrier’s policies, then you are in a better position to respond to any of the carrier’s actions. Keep all current information regarding the claim’s adjudication and appeal processes for any carrier you work with. Carriers usually include this information on their websites; if applicable, provide the hard copies of the information each time you sign a new contract with them.

  • Remember That Help Is Available

If you continue to encounter denial and reimbursement problems with a particular insurance company, do contact the state insurance commissioner’s office for assistance.

How to Fight for an Insurance Claim

If your insurance claims were wrongly denied, the best way to fight for them is to contact an experienced lawyer. He or she will review your options, such as asking the insurance company to reconsider based on new information or filing a complaint against the insurance company if it is acting in bad faith.

Bad faith insurance: this refers to an insurer’s attempt to default on its obligations to its clients, either by refusing to pay a policyholder’s legitimate claim or investigating and processing a policyholder’s claim within a reasonable period.

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