In 2016, there were well over 268 million registered vehicles and over 220 million licensed drivers on US roads. Out of these, several hundred thousand got into crashes. In 2016 alone, there were around 34 thousand fatalities, a couple of million injuries and a few million incidents of accident-related property damage. Today, there’s about a one in 103 chance of passing away in a car accident. Of course, these stats point to the dire need for you, as a driver, auto insurance. Indeed, it is imperative and even required by law in many instances, to have auto insurance.
But of course, not all claims get approved. If you own a vehicle and fear that you may have trouble with your auto insurance claims, then settle in because this blog is for you.
Here are some of the most common reasons why your claim may be denied.
You may have missed a premium
Insurance companies are extremely firm about timely payments. If you miss even one premium, you may find your eventual claim getting rejected. Of course, the right course is to be regular and not miss any premiums. But if you do, then this under certain circumstances (no guarantees!) it may be possible to talk to your agency and get things cleared up. You may have to pay a penalty or a late fee before you can resubmit your claim.
The damages may not be covered
Just like with any kind of insurance, not everything is covered in a policy. It’s best to read the fine print thoroughly before you purchase a policy. There can also be some special conditions and circumstances under which you may not be able to file for insurance. Check the terms and conditions including what’s covered and what isn’t, do your research on the various types of possible damages and liabilities and purchase a policy that covers the most important aspects that could matter to you.
You’re missing comprehensive and collision coverage
This kind of insurance covers you even when you are at fault. This may not be a part of every policy. If collision coverage isn’t a part of your policy, and the accident was your fault, you may expect your claim to get rejected. This is one of the most overlooked aspects when it comes to auto insurance.
You were not swift in making your claim
Just like all insurance claims, you need to report your accident or mishap immediately. You will also probably need to officially log the incident with the local authorities depending on the laws of the land. Time is required for a proper analysis of the vehicle. On your side, time will also give the opportunity to strengthen the case with witnesses if required. Making a swift claim is among the most important steps to take in case of an accident.
It’s a fact that people sometimes exaggerate damages. If you have done so, it could come back to hurt you. Always report the damages as they are, with ample photographic evidence. Your claim should be detailed rather than dramatic. If the insurance companies get even the slightest suspicion of an exaggerated claim, they will straight up reject it.
The car was not added to the policy
If you’re driving a brand-new car that has not been registered with your insurance company, it’s possible that you will get a nasty surprise on your claim. People sometimes forget to update the insurance company in such situations and end up getting paid for claims based on the value of their old car -it’s been known to happen.
Liabilities and disputes
If there’s a dispute about who caused the damage or there is too much confusion surrounding the circumstances of the accident, the insurance company may reject the claim.
The laws in your state
Did you know that 12 US states have no-fault insurance laws? This means that if you’re filing a personal injury claim against a responsible driver, your claim has a chance of getting rejected.
Of course, insurance companies are not looking for excuses to reject your claims. Their business model depends on customer confidence and that depends on generating an impression of a fair and transparent business. That said, they have to deal with thousands of claims and cannot afford to build in too much subjectivity into the approval of each individual claim. They build processes and define clear guidelines to drive approvals and rejections. The system has to account for all possible circumstances. And that’s the system you must understand.
Now you know some of the most common reasons for auto insurance claims getting rejected. This also a pointer on what you need to do avoid having your claims rejected in the future.