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So you’ve involved in an accident. Even if you did everything right – got the other drivers information, called the police, filed a report, dotted your I’s and cross your t’s – your insurance company may still deny your claim. As if getting into the accident in the first place wasn’t bad enough!
After your claim is denied, you basically have one of two options:
Option number two is the definition of “easier said than done”. But it’s not completely hopeless. Here, we’ll explain the steps you can take in order to make sure your claim is not denied in the first place. But if it is, we have some helpful advice for you with regard to the claims resolution process. Hopefully, after reading this article, you and your insurer will be able to come to a resolution that benefits everyone.
“Prevention is always the best medicine” is a platitude which is just as true outside of the medical industry as well as it is within. If you do everything you can to prevent your claim from being disputed in the first place, it will significantly help you in the event that your claim is unfortunately denied. Here’s a checklist you should follow in the event that you get into an accident:
One thing many drivers do not understand about the claims process is the fact that your insurance company does not have to pay out every single claim you file. There are limits to how much you can file a claim for based on the coverage you purchase (or don’t purchase). If the claim you file is substantially more costly than the coverage you have, if your claim hits or exceeds your existing coverage limits, or if you have not bought the particular type of coverage you’re filing a claim for, your claim can be denied and there’s not much you can do about it.
This is why it’s important to purchase as much coverage as you can possibly afford, both in dollar amount and in type. For example, if you don’t have Comprehensive coverage on a car that gets stolen, you’re going to be paying for a brand new car out of pocket. Below is a chart that clearly outlines your long-term savings from purchasing insufficient coverage:
|Bare Minimum Coverage||Comprehensive Coverage||10 Year Savings|
Versus having to replace your stolen vehicle:
The estimates in the graph above aren’t necessarily organized by state, but rather by best-case scenario. And as you can see, no matter how much you save in the short-term by purchasing less coverage than you need, you’re going to take a huge financial hit – all at once – if anything should happen to your vehicle that is outside the available coverage of your policy.
The same rule applies to mandatory state minimum coverages, such as liability, as well as optional coverage such as Collision or Medical Payments. If you cause more financial damage than the coverage limits of your policy will pay out, and you are found at fault in the accident, the other person’s insurance company and anyone who is deemed not at fault in the accident can sue you for damages. Those costs will also come directly out of your pocket.
Another reason your claim may be denied – and here’s where things get exceptionally tricky for people who are trying to prove that their claim is valid – has to do with whether or not you are violating a state law when the accident occurred. Certain legal situations, such as getting a DUI, driving without a valid driver’s license, or driving without auto insurance coverage at the time the accident occurred could all very easily invalidate your claim in your insurance company’s eyes. Furthermore, in some states, your insurance company may have the legal authority to deny your claim if they feel that your particular accident should have been “avoidable”. Obviously, this is extremely subjective, Which further emphasizes the need for extensive and detailed documentation.
In reality there are a great number of random reasons why your insurance company could declare your claim invalid and put all of the financial responsibility on your shoulders. For some companies, even if it’s just a tiny fender-bender and you happen to be blocking traffic by staying at the scene of the accident, moving your vehicles and waiting to call the police could invalidate your claim. If you happen to get injured in an accident, failing to seek immediate medical attention could make your insurance company suspicious about whether or not your medical costs as a result of an accident. This is why it’s important to make sure your report and start documenting the details of your accident as quickly and as thoroughly as possible.
The other miscellaneous cause of denied claims is misrepresentation – either by you, or your insurance company. It’s tempting to give your potential insurer less than accurate information when collecting quotes, hoping they won’t have the resources to confirm whether the information you gave them is accurate. Even if this saves you money on premiums in the short-term, it’s not worth the risk of having a claim denied or having your coverage cancelled unexpectedly once the truth comes out. And if your insurance company misrepresents themselves in any way, such as by operating across state borders in markets where they’re not legally authorized, your claim can also be denied.
If you really want to make sure you don’t have to deal with problems stemming from denied claims, it’s best to put in the time and effort to research the best companies before you decide on an insurance policy. Shopping around for the best price on a quote is good start – but getting helpful information on an insurance company’s financial strength, customer service, and their track record for paying out claims can be equally as important.