It’s happened – you’ve finally ended up in a car accident. Worse, you ended up being labeled the ‘at fault’ party, and your insurance company is now going to have to pay out claims to others for their injuries and property damage. However, once the smoke clears – your insurance company has refused to pay! While this scenario is uncommon, it does occur. Below we’ll look at a few of the reasons why your car insurance claim might be denied.
Insurance Policy Lapses
The most common reason that auto insurance companies refuse claims from their clients is that their insurance coverage has lapsed or expired. If you’re not paying your insurance bill, your insurer is not going to extend protection to you – and you’re going to be on the hook for all of the associated injury and property damage costs that come with being in a crash. It may seem like a simple matter to renew your automobile insurance every year, but statistics show that thousands of people neglect to do this annually and end up getting into accidents while they are driving. In today’s world of automatic account debits or recurring credit card charges, this shouldn’t be an issue. If you’re the type that doesn’t typically remember minutiae such as renewing things annually, the solution is easy: talk to your insurer. Every insurance company has a solution for this, as it keeps the money coming in from their clients.
Insurance fraud is a great reason for auto insurance companies to deny claims. There’s no getting around this – if your insurer thinks that you or another party in your accident is trying to defraud them, they will stop the claim and most likely investigate things further. The most common types of auto insurance fraud revolve around the faking of injuries after an accident has occurred. Typically, the ‘injured’ party will go after the insurer for things like lost wages, while they simply sit at home and enjoy a paid vacation. Property damage claims are also huge fraud targets, with some individuals going as far as to fake the theft of their own car to try to get money out of the insurance company. It’s rather simple to avoid this one – don’t try to defraud your auto insurance company.
Not Enough Coverage
Injury or property damages in an amount higher than your insurance coverage provides are another common reason that insurers deny claims. For example, if you purchase Bodily Injury Liability coverage of $15,000 because that’s your state’s minimum amount of coverage required, but you cause an accident that results in $25,000 in injury-related claims, your insurer will deny everything above the $15,000 in coverage that you purchased. This reason alone makes it worth investing in adequate Bodily Injury Liability and Property Damage Liability insurance coverage. Many states have minimum coverage requirements that are somewhat outdated, and with the ever-increasing costs of medical treatment, these bills are always going up. Keep your coverage at an amount that will protect you – just in case.
Individual Is Not Covered
Your auto insurance claim may end up being denied if the person driving the car at the time of the accident isn’t listed on your insurance policy. This typically happens when a child drives a parent’s car, but the insurance policy doesn’t allow others to be the driver. If you know that you’re going to have anyone else driving your cars, such as a spouse, child or another relative, it’s best to check with your auto insurance company to ensure that they will be covered in the event of an accident. If your current policy doesn’t cover additional drivers, they can generally be added on for a small additional cost.
License Suspension And Revocation
Finally, driver’s license issues are another common cause of claim denial. If you take to the streets with adequate insurance coverage, but you have an expired driver’s license and end up causing an accident, it’s possible that your insurer will deny you coverage. Most insurance policies require that the driver is licensed to drive – if you have an expired license, you might as well not have one at all. Keep your license renewed and avoid running into issues like this.
These are just a few of the reasons that your car insurance claim might be denied – but they are the main ones. The keys to ensuring that your auto insurance covers every incident are to keep your license and auto insurance up to date and to check with your insurer if you’re unsure how your insurance works in the case of other drivers or a high damage claim. Auto insurance companies have been in the business since automobiles were invented, and there are few scenarios that they haven’t seen or devised a policy to protect against. As long as you’re open with your insurer, they will likely be able to cover you in every event.