There are many reasons why your insurance company might deny a claim. If your car accident claim is denied, you’ll want to ask for a written explanation. And if you believe you’re in the right, you can request a dispute.
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What does it mean to have an insurance claim denied?
An insurance claim denial means that your insurance provider has found reason to refuse your request for coverage.
Let’s say you get into a minor fender bender
that ruins your front bumper and headlights. You take your car to the shop for repairs and learn that the cost of repairs will be $3,000. You have a $1,000 deductible, so you submit a claim to your insurance provider to cover the remaining $2,000. To your surprise, your insurance provider responds with a denial of your claim.
Sometimes, your insurance provider will be fully within their legal rights when denying your claims — but there are times when you can fight for a claim approval to receive all the money you are owed.
Why would my insurance company deny my claim?
Insurance claims adjusters have the sole responsibility of approving or denying claims. Claims adjusters look at the details of your claim and verify if your provider actually does owe you money in your particular situation.
Adjusters are also trained in looking out for insurance fraud (false claims people make to scam their insurance providers out of money).
Here are some of the most common reasons for a claim being denied:
You hit your policy limit
Let’s say you get into an accident (for which you were at fault) and incur $40,000 in medical bills—but, the insurance policy you purchased only covers up to $30,000 in bodily injury expenses after your $1,000 deductible. In this case, your provider would deny the last $9,000 of your claim since that coverage was never purchased in the first place.
You purchased insufficient coverage
If you file a claim for $5,000 in medical bills but your car insurance policy only includes collision coverage
, your claim will be denied. You filed an improper application
Having everything reported accurately in your claim is integral to having your claim approved. An insurance company can deny your claim if anything is misreported—even if the mistakes were unintentional.
Your claim can also be denied if you are found to have been dishonest about any information when you originally purchased your insurance policy.
You broke the law
An insurance company can deny your claim if you were found to be partaking in illegal activity at the time of your accident—for instance, being under the influence. This applies even if you were not at fault in the accident, such as being under the influence when another vehicle hit you.
You didn’t file the report promptly
Your provider can deny your claim if you unnecessarily delayed filing it. A delayed claim
is also a red flag for insurance fraud. Reading the fine print of your insurance policy will help you decide the right policy to purchase—before you face the unfortunate situation of having to make claims to your provider.
Car insurance broker app Jerry makes the process as simple as possible by locating your best policy options from over 40 different insurance providers—all you have to do is decide the coverage you want and price you’d like to pay! You can purchase your new policy in-app, and Jerry will help you get all the paperwork squared away.
Key Takeaway Claims can be legitimately denied if you hit your coverage limits, fail to file promptly, or break the law, among other reasons.
What do I do if my insurance claims are denied?
Your situation is not hopeless if your insurance claim is denied, and you might still be able to get the payout you are owed by your insurance provider.
Ask your provider for a letter outlining why your claim was denied. This first step is important so that you have written verification of your insurer’s understanding of your situation. It will also help you assess whether your provider is in the right or the wrong denying your claim.
Request a dispute. Requesting a dispute with your provider is the formal method of challenging your provider’s decision to deny your claim. You will need to provide all the verification possible on why your provider owes you money according to the policy you purchased.
Hire an independent claims adjuster. Independent claims adjusters are third-party adjusters that may help your case by verifying all the information about your vehicle and the damages.
Contact the Department of Insurance. This will put your case into the stage of arbitration, in which a third party will consider both sides of the case (you vs. your insurance provider) and come to a legally binding decision on whether your claim should be upheld or denied.
Hire an attorney. This step achieves the same result as contacting the Department of Insurance—but independent attorneys can be more efficient and timely (and less work for you) than the Department of Insurance. This option will cost you money and may not be worth it unless your provider legally owes you a significant amount in claim payouts.
Key Takeaway If your claim is denied, you can file a formal dispute or hire a third-party adjuster to assess the situation.
How do I prevent having a car accident claim denied?
Simpler than contesting a claim denial is doing all you can in the first place to prevent your claim from being denied.
Here’s what you can do to prevent having your insurance claims denied:
Report everything immediately
Timeliness is key for making insurance claims. The longer you wait,
the more likely you are to have your claim denied. Report everything accurately
Insurance claims adjusters are trained to be on the lookout for insurance fraud. Anything that you report inaccurately about an accident will be a huge red flag to a claims adjuster.
You should also make sure that you’re always being proactive and honest in reporting the status of your vehicle to your insurance provider. For instance, always be upfront about the mileage on your vehicle and any significant improvements that have been made to your car.
An insurance provider can have a legitimate claim denial if you report any incorrect information about you, your vehicle, or the accident—even if this misinformation was unintentional on your part. You should always double- and triple-check all the information you give to your provider before you formally submit your insurance claim.
File a police report
If the damage to your vehicle is due to vandalism or other criminal activity, you should file a police report. Failure to file a police report for something like vandalism can be a sign of insurance fraud.
Get estimates for repairs (and have them documented)
This will help you know the precise amount you need to make a claim for and will verify the amount of your claim for your insurance provider.
Seek medical attention immediately
It may take multiple days (or weeks) for you to feel the physical effects of an accident. It’s always a good idea to seek medical attention as soon as possible after an accident to verify any potential injuries.
If you wait too long before seeking care and filing a bodily injury
claim, your insurance provider may suspect insurance fraud and deny your claim. Being proactive and seeking medical attention from the get-go can protect you from having your eventual claim denied. Read the fine print of your insurance policy
Of course, your provider will have a legitimate claim denial if the claim you make isn’t covered in your policy to begin with. Read through the details of your insurance policy to know what you can reasonably (and legally) expect from your insurance provider when you make a claim.
Key Takeaway To avoid a claim denial, understand your coverage and be sure to report everything accurately and in a timely manner.
Finding insurance with the coverage you need
If you want to reduce your chances of having a claim denied due to inadequate coverage, reviewing your insurance needs before an incident happens is a good idea. And there’s no better place to start looking than Jerry
. As a licensed broker
, Jerry does all the hard work of finding the cheapest quotes from more than 50 name-brand insurance companies and finalizing your new car insurance. Jerry will even cancel your old policy for you! And to ensure you always have the lowest rate, Jerry will send you new quotes every time your policy comes up for renewal, so you’re always getting the coverage you want at the best price. This level of service is why Jerry earned a 4.6/5 rating on the App Store and made it the top insurance app in the country.
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Frequently asked questions
What do I do if my car insurance claim is denied?
First, read through your policy to verify your coverage and deductibles. Request a letter from your provider outlining why your claim was denied. Then, you may request a dispute with your company.
If this is unsuccessful, you can contact an independent claims adjuster, hire an attorney, or contact the Department of Insurance to see that your provider pays out what you’re owed.
Will insurance go up if my claim is denied?
Yes, potentially. If the accident you reported leaves a negative mark on your driving record, your insurance rates may go up.
Jerry can help you find the cheapest car insurance policies if you’re facing an increase in your premium.
Is it bad if my insurance claim is denied?
It depends on your situation. A claim for medical bills being denied could mean huge expenses that you cannot afford and must cover out of pocket. You might also be looking at higher insurance rates if the accident you reported left a negative mark on your driving record.
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