Top Reasons For Car Insurance Claim Denial

It turns out that insurance providers have every right to deny claim applications if your situation falls into some of the most common scenarios that are easy to prove invalid in court. If you are not aware of such reasons yet, here are some of them so you can avoid making the same mistakes.

Inconsistent Payment or No Payment

The idea is, you slowly pay for coverage so that when the time comes you need it, you can request for a good amount of money. It’s just like a bank wherein you deposit an amount slowly until the time you withdraw it in full. If you don’t pay on time, you will definitely get a poor credit history. If you don’t pay at all, you’ll be lucky to still have your insurance policy active. If you have been such a bad client, it is normal for you to get a claim denial. Insurance coverage requires money to spend. If you don’t give the funding beforehand through premiums, there’s really no other place for the company to get the finances from. At least they surely won’t take it from another person’s contribution.

Avoidability And Causation

In the case of car accidents, a lot of times the reason behind it is questioned by the insurance firm. This is normal because some policy holders enter into an accident on purpose just to get the money. If by any chance you are proven guilty of faking or causing the accident, expect to get a claim denial. If by any way you could have avoided such accident and this was proven true by the company, you can also get a claim denial. This is what is termed as preventable accident in Quebec.

Misleading Information

This reason can be complicated. Imagine yourself fresh from the accident, wounded and incoherent. You will be interviewed by the officers and you will be providing information about what happened. The following day, you go to your insurance company to report the incident and ask for a claim. You get interviewed again. As part of the procedure, the police report will definitely be submitted as evidence including a copy of the testimony you gave to the officers. What if the information you said the night before and the day after doesn’t match?
This type of scenario is common among severe accidents that have caused major injuries to the policy holders. While this can still be corrected by proving the mental incapacity of the person during one of the interviews, it will still have to be taken to court for proper hearing. This type of situations gets even more complicated once you still get a medical claim denial. In order to avoid this, it is best to think very hardly about the events before giving out any kind of testimony.

False Information

This might sound a little similar to the above, but it’s based on the information you provide to the insurance company when you first get the insurance. A good example is when the insurer asks the purpose of the vehicle and you say its personal use. You will be made aware of typical mileage records for personal use vehicles. If your mileage obviously shows that you have been using the vehicle for commercial use, and you reported to the company otherwise, it is grounds for a claim denial.

Non-Authorized Vehicle Users

Upon getting the insurance, you will be asked to disclose the possible people who will be driving the vehicle. This is to check if the car might be in more risk than usual especially if you have newbie drivers listed. If by some chance an unauthorized driver was the one driving the vehicle when the accident happened, you can get a medical insurance claim denial. This is a common occurrence among parents who lend their cars to their kids for a late night errand or function. Sadly, it is a valid reason for insurance companies to deny you benefits.

Invalid or Suspended Driver’s License

If you have taken the insurance with a valid license, but got a suspension recently, it is best to drive safely. It turns out that even a suspended driver’s license can be a reason for companies to make a claim denial. This is of course if during the time of the accident you have a suspended license and is driving the vehicle. The reason for the suspension does not weight very much on the case. What matters here is that you are not supposed to drive since you are under suspension but you managed to get into accident.

Criminal Activity

This is self-explanatory. Any use of the vehicle for any form of criminal activity will be punishable by law including a claim denial. You have proven yourself incapable of sound reasoning by involving yourself in a crime. This is a just reason for companies to deny your claim application and possibly revoke your insurance policy altogether.