We get auto insurance firstly because we are legally required to in order to drive, and secondly, to protect ourselves in the event of an accident. Depending on the extent of your coverage, you can file a claim for replacement, medical bills, damages or theft of your car and good auto insurance companies will handle your claim quickly and painlessly. However, be aware that even if you have insurance, there is no guarantee that your claim will be accepted.

Common Reasons for Claim Denial:

• Not part of coverage

If you only get minimum liability coverage, then chances are that the extent of support you’ll get from your insurer is extremely limited. For example, minimum liability will not cover damages to your own vehicle if you have an accident. If the other party is an un/underinsured driver, you better have collision or Underinsured Motorists Coverage, or you can kiss your compensation goodbye.

• You do not qualify to be covered under the specific policy

You will be denied coverage if you’re not legally covered under the policy. For example, if you are a high risk driver or a teenager, your name may specifically be excluded from the policy, and in that case, you will not receive compensation and any claims you make will be denied.

• Lapsed coverage

If you fail to pay your insurance premiums, chances are the insurance company will drop you. If you have an accident even a day after your insurance company has cancelled your policy, you are uninsured and will have to pay for all the damages on your own.

• Excess

If the amount you claim exceeds the limits stipulated by your policy then the claim will be denied. The insurance company will only pay a certain amount, which is specified in your policy, and any amount beyond that will not be covered.

• Fraud

If your claim is fraudulent, then the insurance company will deny it and most likely cancel your policy. Don’t forget that being charged with insurance fraud will get you into serious trouble with the law, ranging from fines to jail-time.

If your claim is wrongfully denied:

There are cases when insurance companies wrongfully deny claims. If this happens to you, know that you aren’t helpless.
Your insurance company is legally bound to settle legitimate claims that fall within the limits of your policy, and there are measures you can take if you think that they have neglected to do so.

• Contact your insurance provider with documentation

The first thing to do is contact your insurance company. Make sure that all your evidence is in place, including eye-witness testimonies, policy reports, photographic evidence, etc., and present it to your insurance company. Ask them to reevaluate your claim and reconsider their denial.

• File an Appeal with State Insurance Commissioner

If reasoning with your insurance provider doesn’t work, then you should file an appeal with your State Insurance Commissioner. Enclose the letter sent by your insurance company when they denied your claim (they are required to send you written notice of denial) in your appeal.

• Hire an Attorney

Your next recourse is to hire an attorney and sue your insurance provider for bad faith, breach of contract, and/or violations of your state’s insurance code. Make sure that you take prompt action because each state has a specific time limitations on filing claims, and if you have exceeded it you may not be allowed to take legal action against the insurance company.

• Switch to a New Provider

Even if your car insurance company comes around after you take these measures, deliberate wrongful denial of a claim clearly tells you that they are unethical and unreliable. With this knowledge, it is clearly time to get auto insurance quotes online from reliable, reputed providers and switch to the one that gives you the best car insurance rates.

Purchasing insurance gives you the right to file claims when you need to but your claim will not be accepted unless it falls within the limitations of your policy. However, if a claim is wrongfully denied, make sure that you fight for your rights, and do everything you can to get the compensation that is rightfully yours.

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