Why is my car insurance claim denied?

As if getting into a fender bender isn’t bad enough, the added worry of your claim being denied can be devastating. This is especially true when you are named the at-fault party in the accident.

However, how and why do car insurance companies sometimes deny a claim?

There are several reasons your claim could be denied by a car insurance company. In many cases, it’s a lapse in coverage. Many of us have done it before, forgetting to renew the car insurance on the day it’s up for renewal.

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Lapse in Coverage

While it’s a simple matter to renew your car insurance without it expiring or lapsing, thousands of people forget to do it every year.

Unfortunately, it can have a devastating backlash if you get in an accident with an expired car insurance policy. You’ll be liable to pay for all injuries associated with the accident including property damage to any vehicle involved.

With direct deposit and automatic debits, this can be avoided, especially for those who are forgetful when it comes to renewing their policy.

Unlisted Driver

If someone else is driving your vehicle at the time of an accident and he or she are not included in your policy, your claim can sometimes be denied.

Many times a child will borrow their parent’s car, even though they are not covered by the policy.

Sometimes it’s a spouse, friend, or relative, but if they are not on the policy, they will be liable to pay out-of-pocket during an accident.

Denied for Further Investigation

Sometimes insurance companies will deny claims to investigate the accident further and the claims associated.

This could be because the insurance company believes either you or another party involved in the accident are committing insurance fraud.

There are several reasons for insurance companies to look into fraudulent activity. Some parties will fake injuries and try to collect on lost wages when they were just at home or to hope to take a paid vacation.

There are also those cases where the combination of damages and injuries are so high they exceed the amount of coverage.

If your liability coverage is only $25,000 and the combined injury-related claims are $30,000, then the additional $5,000 in injuries will not be covered by the insurance company resulting in a partially denied claim.

Expired Drivers License

Taking a trip to your state’s Department of Motor Vehicles is a dreaded event. Long lines and sometimes the daunting task of filling out even more paperwork than you care to see in a year, let alone a day.

However, if you drive with an expired license and end up causing an accident, your insurer may deny your claim even though you have high insurance.

Those who drive older vehicles or who don’t have a loan on their car might only carry liability insurance with no collision coverage.

If this is the case and liability is all you have, you will be denied coverage for damages done to your vehicle.

Inadequate Information

Many times the other party involved will claim not to have insurance, or you don’t get adequate insurance information from them.

In this case, you would file an Uninsured Motorist claim with your insurance company.

They may deny the claim if they find out the other party is indeed insured.

What do you do if your claim has been denied and you are covered?

If you receive a denial from your insurance company, it’s best to go back and read all the fine print. If you believe you’ve been inaccurately denied, you do have rights under state laws and your policy to settle your claim.

What you should do first is give your insurance company the opportunity to re-examine the claim. Make sure to have all the adequate information and either call or write to your insurance company pleading your case.

Some don’t feel adequate doing this themselves and that’s when hiring an attorney is advised. If the insurer continues to deny your claim, it may be time to take action and sue the insurance company.

Should I hire a lawyer even before my claim has been denied?

Some people feel that the process claims and settlement is drawn out too long. They also think that their needs are not being met during the time of an accident, but also are tired of all the follow-up calls with the insurance companies.

It can be beneficial to hire an attorney to help with the process, especially when you are seeking a settlement.

Attorneys can take over the long and frustrating process of getting claims taken care of in an efficient and timely manner.

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