Most people pay their auto insurance premiums and trust that the coverage they are paying for will be in place if they ever have a loss. When a driver contacts the insurance company to report a loss, the question, “What should I do if my auto insurance claim is denied?” is probably not one which immediately comes to mind.
The first thing a driver should do if his or her auto insurance claim is denied is to request that the insurance company send out an official denial letter. It will contain the reason the claim is being denied, and this information can be used to challenge the denial.
Find Out Why Auto Insurance Claim was Denied
Insurance companies can make mistakes when denying claims made by their policyholders. Review the policy language to find out exactly what types of losses are covered and what policy exclusions are in place.
It is possible that the insurance company made a mistake when it denied the claim, and a consumer doesn’t have to accept the denial as being the final word in the matter. The reasons the insurer has given for denying the claim can be challenged.
Reasons for Denying an Auto Insurance Claim
There are a number of reasons why an auto insurance claim may be denied. The insurance company may say that the insured is not covered for the claim being made. For example, if a policyholder is driving an older vehicle and has decided to drop the collision coverage due to the car’s low cash value, he or she will not be able to make a claim for the cost of repairs if an accident occurs.
The insurance company will also deny a claim if the coverage has lapsed for non-payment.
If the person driving does not qualify as an insured under the policy (such as in a case where a vehicle was borrowed without permission or the driver was specifically excluded from the policy), the insurance company will not pay out on a claim.
A driver who makes a claim under his or her uninsured motorist coverage will not be successful if it turns out that the other driver does have coverage.
If the amount of the claim is higher than the coverage limit on the policy, the insurance company will not pay the excess amount.
The insurance company will not pay out on a claim where the vehicle is not listed on the policy. A driver who has recently purchased a new car but did not arrange to add it to the policy in the time specified by the insurer.
Dispute an Auto Claim Which Has Been Denied
Policyholders have the right to dispute the insurance company’s denial. The first step is to write a letter to the company to explain why the claim should be paid, and be sure to include relevant supporting documents. If the company refuses to pay the claim, the policyholder can ask the State Insurance Commissioner to investigate the matter.