Credit: Shutterstock photoYou pay for auto insurance every month, so when the time comes to actually use it, you expect your company to make the process as smooth as possible for you. Unfortunately, that is not always the case and sometimes your claim may be denied. Having your claim denied can be incredibly frustrating and leave you scratching your head as to what you did wrong. Many times the company or the company you are filing against will have a legitimate reason for denying it. On the other hand, the reason could actually be unfair. Insurance is a tricky game. Here’s what to do in either case.
Legitimate Reasons for a Claim to Be Denied
Exhausting Policy Limits
The coverage you choose for your car is reflected in your monthly premium. If you have $50,000 limit for bodily injury liability, and you cause an accident that costs $100,000 in medical expenses to the other driver, your company is not going to cover that extra $50,000. As well, if you do not purchase collision or comprehensive insurance, your company is not going to pay out for damage to your car that you caused. We recommend when it comes to bodily injury and property damage insurance to pay for as much coverage as you can possibly afford. A bad accident can be financially ruinous if you are not fully covered.
Violating State Law
Your claim has a good chance of being denied if you were found to be breaking any laws at the time of your accident. If for example you were driving while intoxicated, or driving with a suspended license, or even speeding, your claim may be denied. This is especially true if you are filing through a third-party insurance. They will try to find any reason to not have to pay out for your injuries or damage costs.
Violating Insurance Policy
Your auto policy also has some rules built into it. Remember your payments reflect what you signed up for and they do not go past that. Essentially, if you are using your car for anything outside of that policy, there’s a good chance your own insurance and a third-party insurance will not accept the claim. One common example is the case of rideshare drivers. If an Uber driver gets into an accident while the app is on, but before picking up a passenger, your auto company can deem that a ‘business’ related accident. If your car is not specified as a business vehicle, the company may not accept the claim.
Miscellaneous Reasons
If there is any reason for your company or a third party company to think your claims are fraudulent, they may deny the claim. The best way to remedy this is to collect as much information as possible at the accident. Pictures, police reports, immediate reporting to the insurance company, as well as prompt medical attention if it is needed. Any delay in the proceedings may make a company suspicious.
If You Still Think Your Claim Was Unfairly Denied
If you carefully assess the legitimate reasons for your claim to be denied and still feel wronged by the insurance company, you may file a complaint with your state’s Department of Insurance. Every state has a department and they usually have a special unit to deal with denied claims. In California for example, there is the Claims Mediation Program that helps consumers negotiate with their insurance company to pass their claim. If all else fails, and you have exhausted the appeals process, your next option is to speak to an attorney to consider any legal strategy.
Advice for Filing a Claim
It is recommended that whenever you can, file through your own insurance as opposed to another person’s. Simply, going through your own company gives you a higher chance of approval. Another person’s insurance may not prioritize your claim and even may be hesitant to approve it. Using first party insurance is easier in “No-Fault” states which make personal injury protection (PIP) insurance mandatory. With PIP you are going through your own insurance first. The process is usually faster and simpler which is great if there are emergency medical expenses. In Florida, the minimum required PIP is $10,000, which can be enough to take care of any of your own damage or medical expenses. Essentially, if you can avoid ever filing against another party’s bodily injury or property damage liability insurance, do so.
Furthermore, personal injury attorney Jonathan G. Stein advises drivers to be sympathetic and cooperative when dealing with an adjuster. Claims adjusters can work anywhere from 100 - 400 claims at a time, depending on the size of the company's claims department. They may only be visiting these claims once a month. It sounds simple, but because of the overload of work, they do actually tend to be more pleasant and helpful with consumers who are easy to work with and are understanding.
Lastly, in the case of an accident, you should always gather as much information as possible. The more valid information there is, the easier it is to file the claim and the harder for a company to deny it.
The article Denied Auto Insurance Claim? What You Can Do Next originally appeared on ValuePenguin.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
