What Causes Your Car Insurance Claim to Be Denied?

Last Updated on December 30, 2020

Car accidents can be incredibly stressful, and having your car insurance claim denied after an accident can feel like it’s just adding insult to injury. It’s particularly frustrating if you aren’t sure why your car insurance claim was denied. Although you can contest a denied car insurance claim if you need to, it’s helpful to know the most common causes of car insurance claim denials in the first place, so that you can prevent them from happening. Here are some of the most common reasons why car insurance claims are denied.

Your insurance coverage lapsed.

If you don’t stay on top of your car insurance payments, your coverage may lapse before you even realize it. It’s also possible that your coverage might have ended, and you forgot to renew it before the time of the accident. Your car insurance company will have a filing deadline that indicates when you need to get your renewal documents in, and if you miss this deadline, they won’t continue your coverage. To prevent your insurance claim from being denied for this reason, be sure to stay on top of your payments and renew your policy on time.

Your policy doesn’t provide enough coverage.

Another common reason why car insurance claims are denied is that your policy doesn’t provide the appropriate coverage for the type of accident you are in. For example, if you don’t have comprehensive coverage and you file a vandalism claim, you might be denied, because your policy only covers collisions. If your expenses outweigh the maximum financial coverage, you also may be denied, or only receive partial coverage for the claim. To prevent this from happening, look into comprehensive insurance policies if it’s within your budget.

You were at fault for the accident.

Although there are some accidents where one party is obviously at fault, in many accidents, it’s much harder to place the blame. One of the reasons your insurance claim may be denied is if the insurance company determines that you were the one at fault for the accident. Some states have fault laws that prevent insurance companies from providing coverage to drivers who were at fault in an accident. Be sure to know your state’s insurance laws, and always take detailed notes and pictures after you were involved in an accident. This can help you contest it if the driver determines you were at fault.

The driver involved in the accident isn’t on the insurance policy.

A common mistake that many people make is assuming they can get coverage for damage to their car that happens when someone else is driving it. For example, many people will let a friend drive their car, and then make a claim if their friend gets into an accident. However, if the friend isn’t on the insurance policy, the company will deny the coverage. Another common example of this problem is when parents start teaching their teenagers to drive, but neglect to inform their insurance policy. You should always make sure that every regular driver of your car is listed on your insurance policy. Yes, it can make your monthly premiums a little more expensive, but it can save you a huge amount of money in repair expenses down the line.

You were using your car for business, but your policy only covers personal use.

Many people don’t realize that if they use their car for business purposes on a regular basis, their insurance policy needs to provide business coverage. Your claim could be denied if the insurer finds out that you were using your car for business purposes when the accident happened. If you are going to be using your car for a business trip, be sure to call your insurance company and discuss your options ahead of time. You should also make sure to get appropriate coverage if you are driving for a ride-sharing company, as this is a very common reason why claims get denied.

How can I contest a denied insurance claim?

If your insurance claim has been denied, you can usually contest it. However, it’s important to be aware that this is difficult to do, particularly if it’s been a long time since the accident actually happened. To contest a claim, gather all of the evidence you have relating to the accident, and write your insurance company a detailed letter specifying why they should approve your claim, and refuting the insurer’s decision. You may want to hire an experienced attorney to help you navigate the appeals process, as they can increase your chances of getting your insurance company to reduce their decision. An attorney can also help you if your appeal ultimately gets denied again. One of the best remaining options is to file a lawsuit against the other party in the accident to get the financial compensation you are looking for.