Can an Insurance Company refuse to pay a Claim? For everyone that is asking the question, “Can an insurance company refuse to pay a claim?” The answer to this question is a big “YES!” Insurance companies usually refuse to pay claims because they do not want to incur losses. That is one of the reasons, but the major reason has to do with the policyholder that normally files the claim.
Therefore, in this article today, we are going to be taking a deep dive to answer the question of whether insurance companies can decline to pay a claim. The answer is obviously yes, but that is not everything you need to know. We are going to take a look at the reasons why they deny claims. And then we are going to finally take a look at what you need to do after your claim has been denied.
Can an Insurance Company refuse to pay a Claim?
Everybody with half a brain can simply file a claim. However, not all claims are going to be approved and settlements paid out. In fact, the majority of claims that are filed are generally declined by the insurance company. This means that an insurance company can refuse to pay a claim when they deem it fit to do so. So the answer is yes, and the insurance company can refuse to pay a claim.
That being said, there are many reasons why an insurance company might decline a claim. This means that you have to do your proper research and homework to make sure your claim is not declined. Reading this article today is going to be good for you because we will take a look at the reasons why an insurance company declines claims and also what steps to take when your claim has been denied.
Insurance Companies Deny Claims
It is your right as a policyholder to file a claim when you feel like it is in place or proper to do so. At the same time, it is within the right of the insurance company to turn down your claim when they feel like it is not relevant. If you have had your claim denied in the first place, you are not the first because insurance companies have been denying claims since they existed.
After having your claim denied by your insurance company, you should not just sit down and fold your hands. You should ask for the reasons why they did so if the company did not give you any. Your insurance company is required to explain why it denied your claim.If you have seen these reasons, then it is time to take action.
Why Do Insurance Companies Deny Claims?
There are many reasons why an insurance company would deny your claim. Most of these reasons are due to customer negligence or lack of experience. If your claim has been denied before, one of the below reasons is definitely the cause.
- Problems With the Insurance Policy or Coverage
- No valid coverage exists for the incident.
- When your coverage has lapsed
- Damages are excluded from your coverage.
- Drivers’ exclusion policies
- Disputes over liability and who is at fault.
- Injuries are not caused by the accident.
- The extent of your injury is exaggerated.
- Lack of evidence to establish fault
- Bad Faith Practice
- Failure to File a Timely Claim
The above reasons are some of the reasons why many people have their claims denied by their insurance companies. As I have mentioned, it generally has to do with the fault of the insurance policyholder.
What to do when your Insurance Claim is Denied?
Now that you have seen some of the reasons why your insurance claim has been denied, there are certain things that you need to do after your claim has been denied. Some of the most important steps to take when your claim has been denied are listed and explained below:
Know the reason why your claim was denied
The first thing to do is to simply know the reason why your claim was denied in the first place. It doesn’t matter what type of claim it is, you need to know why it was denied first of all. It is customary for insurance companies to send you an email regarding the reason why your claim was denied. However, if you did not get one, you can simply contact your insurance company to demand an explanation.
Report the issue to your state insurance department
After you have known the reason, the next thing you need to do is simply report the issue to the state insurance department if you are not at fault. All you need to do is to get in touch with your state department of insurance and then report the issue to them. They will carry out their own investigation and then probably compel your insurance company to pay you your settlement if need be.
Contacts insurance claim professional
After you report the problem to your insurance company, they will almost certainly contact an insurance claim professional to assist you with your appeal. They are professionals, so they know how to handle your case so that you can successfully file an appeal to get the needed results. As a result, you should seek the assistance of a reputable insurance claim professional.
File an appeal
Filing an appeal is your right after your claim has been denied by your insurance company. Which is the last thing to do because you are on a ticking clock after your claim has been denied. With the help of the insurance professional that you employed, simply file your claim with your insurance company. After filing a claim within the time limit, wait for an answer from your insurance company.
Frequently Asked Questions
What happens if a claim is denied?
After your insurance claim has been denied, the next step is for you to simply go ahead with the appeal process after finding out the reason it was denied. You can also decide to go for that by filing a lawsuit against your insurance company and employing professional insurance claim individuals.
Why would an insurance claim be denied?
There are several reasons why insurance companies deny claims. In this article, I have listed some of the reasons that might lead to your claim being denied by your insurance company. All they need to do is simply scroll up and see the reasons.
How Can I Appeal the Denial of My Claim?
Depending on the type of claim that you are filing, you can simply seek the help of professional individuals. If it is a car accident, you can simply employ your attorney to help you file your insurance appeal claim.
Can I Sue My Insurance Company If They Deny My Claim?
Yes, it is very much possible to sue your insurance company if they deny your claim. This is especially true if you believe that your insurance company has acted in bad faith by denying the claim. All you need to do is to get an attorney and then file a lawsuit against your insurance company after gathering all the evidence.