Consumers are given many reasons as to why they have been denied an insurance claim by Insurance companies. There are many situations that are either unknown to the consumer or that they had overlooked when filling out an insurance claim.
When an insurance claim is made and the Insurance Agent notifies the customer that they have been denied, the customer should immediately examine his policy looking for any possibility that the agent has misinterpreted the denial. Misinformation or incomplete information could be a possibility.
Some of the most common reasons for insurance claim denials are as follows.
1) Making a claim when the appropriate coverage does not exist. This may arise due to the fact that you opted to buy a cheaper policy with only liability coverage and no collision. Many people will do this after purchasing an older vehicle in which they decide not to have the full coverage.
2) Lapsing insurance coverage in which premium is not caught up at the time of the accident.
3) The policy cap is exceeded with your vehicles damage, and the vehicle has not been written off and is fixable. This sometimes happens when people get fooled into lowering the policy cap to benefit from a cheaper premium.
4) You made a claim error such as making an under insured motorist claim and then it turns out the other driver was adequately insured.
5) New vehicle purchase was not added to present policy, failure to notify agent to add new vehicle.
6) The person driving at the time of the accident is not insured under you policy as a second driver such an excluded teenager under their parents insurance policy.
These are just some of the common reasons an insurance claim can be denied.
If you review the reason behind the denial and you see that the denial was wrong there are some steps that you may take to further appeal the decision. Since the Insurance company is obligated to fully settle your accident claim as soon as possible under good faith, you still have certain rights indicated in your policy and within the law for them to do so.
A few things you should do if you feel you claim was improperly denied.
1) Write a letter to notify the Insurance Company of any mistake that you have found in the decision with properly organized documentation as to your findings.
2) Go to the Sate Insurance Commissioner with your appeal.
3) Go to an insurance bad faith attorney with your case.
4) Your next option would be a law suit for bad faith, breach of contract, and anything that is in violation of your State Insurance Code.
Before preceding with your steps for a law suit, make sure you fully understand the Insurance Companies reason for the denial. If you still feel they are in the wrong, speak to an attorney and make sure that the Insurance company has denied your claim wrongly.
If the insurance company realizes that they are in the wrong , they will re-open the claim and follow through with the procedure to fulfill their obligation.
