Top 8 Reasons Car Insurance Claims Are Denied

July 23, 2021 by Barry Zlotowicz Auto Accidents 

Top 8 Reasons Car Insurance Claims Are Denied

Did you file a claim with the car insurance company and your claim was denied? Check out this short article to learn the top eight reasons why insurance companies deny claims.

Insurance Claim Denied Because You are at Fault for the Accident

The first reason why an insurance company may deny your claim (assuming that you file a claim with the insurance company for the driver who hit you) is that they may have found you at fault for the accident.

They’ve interviewed their insured, maybe you gave them a recorded statement, they analyzed the physical evidence and they denied your claim.

Well, if they deny your claim, because they assume that you are at fault for the accident or that you’re “liable” for the accident and you disagree, what are your options?

Well, you have two options. First, if you only have property damage, and if you have insurance coverage that covers your property damage, you can file a claim with your own insurance to get the property damage fixed.

But what if you have bodily injuries? What if you suffered pain and suffering and you disagreed that you were at fault for the accident? Well, then your only option is really to file a lawsuit.

If you’ve suffered very minor injuries or just property damage, chances are that you don’t need a lawyer. But if you suffered moderate to severe injuries, I strongly recommend consulting with a personal injury attorney.

If you would like to speak with us about your accident call 1-847-305-4105.

What if they Found Me Partially At Fault for the Accident?

It may be that they find that their insured is 80% at fault and they put 20% of the fault on you. Well, what can you do?

Check out this short video to learn more about this topic:

Insurance Claim Denied Because of Lapsed Policy

The second reason why an insurance claim might be denied applies whether you filed a claim with the other guy’s insurance or with your own insurance.

That’s a situation when the insurance policy that you’re trying to claim from has lapsed. After denial due to fault, denial due to a lapsed policy is the one thing that I see the most out of all the other reasons why insurance companies deny claims.

Maybe you forgot to make a payment or the bill got lost in the mail. Doesn’t matter. Stay on top of your insurance payments because if the policy lapses and is not in effect at the time of the accident, there’s not going to be insurance coverage.

When I say at the time of the accident, I mean, “at the time of the accident.” I had a situation where a person got in an accident only to find out that his insurance policy had lapsed. When he got home, he tried to make an insurance payment, but the insurance claim was still denied. Why? Because the policy was not in effect at the time of the accident.

Insurance Claim Denied Because Timeline Missed

The third reason I see insurance claims get denied quite often, is that the claimant didn’t file a claim within a set standard period of time.

This is very common with substandard insurance companies. The kind you see that are running advertisements at 12 o’clock at night. They are often local insurance companies.

They have very strict time periods to file a claim within 30 days of an accident happening for example. If you don’t file within that set period of time, they’re going to deny your claim.

This is why I always encourage people not to delay filing a claim with both insurance companies immediately after an accident.

Yes, file a claim with the driver who hit you, but also always file a claim with your insurance company too.

Insurance Claim Denied due to Fraud or Lying to the Insurance Company

The fourth reason I see insurance claims denied is that there’s fraud involved, or the claimant lied to the insurance company.

Lying to the insurance company is the sure fire way to get a claim denied. That includes lying to either yours or the other guy’s insurance company.

With regard to fraud, we have not seen a lot of fraud and when we have seen it, which has only a been a couple of times in all these years of doing this, we haven’t gotten involved in those cases.

Insurance Claim Denied Because of Excluded Driver

A fifth reason I’ve seen claims denied is that the person driving the vehicle at the time of the accident was an excluded driver. What do I mean by that? Well, when you signed up for your insurance policy, you may have had a kid living in her house and that kid had a bad driving record.

So, the insurance company in exchange for giving you an insurance policy specifically excluded that driver from being covered under the policy. If the excluded driver was driving the car at the time of the accident, they are not going to be covered when you file a claim with your own insurance company for those damages.

There are other situations as well, where drivers who are driving your vehicle at the time of an accident may be an excluded driver. You really have to check your insurance policy to see who is and who is not a covered driver.

That’s why we always tell people after they get involved in an accident, make sure you get a copy of your policy right away so that you can read it for yourself.

Insurance Claim Denied Because of Illegal Activity

A sixth reason why I’ve seen insurance claims get denied is that perhaps you were breaking the law at the time of the accident.

Now this is not a very common situation, and I’m not talking about speeding at the time of the accident for example. But, if you have a history of driving while under the influence and you got into an accident while you were drunk – you may have a clause in your policy that specifies that if you were engaging in illegal activity, that you will not be covered under your insurance policy.

We’ve also seen a lot of claims where drivers of Uber, DoorDash, GrubHub and Lyft and those kinds of folks they have their insurance claims with their own personal insurance denied because they were engaging in commercial activity at the time of the accident.

In short, you have to check your policy, whether you’re going to be covered when engaging in a commercial activity.

Insufficient Insurance to Cover Your Damages

The seventh reason why an insurance claim made be denied is that there’s not enough insurance policy to cover your damages.

Let’s take a hypothetical. Let’s say that you have a Mercedes-Benz and it’s worth $80,000 and the guy who hits you has $15,000 in property damage insurance. Well, there’s a $65,000 difference there. The insurance company is only on the hook for what they contracted to insure, and that would be $15,000. So, in this case, while your claim wouldn’t be denied, you’d only be able to recover that $15,000 from their insurance company.

Hopefully you personally have a much larger insurance policy that you can tap into on your side as well. But that’s another reason why I’ve seen claims falter if not be denied.

Claim Denied Because of Misleading Information When Insurance Contract Signed

The eighth reason why an insurance claim may be denied, goes all the way back to when you signed your insurance policy. Maybe the driver didn’t tell the truth when they signed their insurance policy.

Perhaps the driver didn’t tell State Farm that they had 16 year old kids living in the house at the time of the accident, and they were going to drive the vehicle. Or perhaps the driver you made a misrepresentation about their driving record, or they said something else that was false.

We’ve seen insurance companies try to take that information and use it to deny claims.

This is not an exhaustive list – an insurance company will try to deny your claim for any reason they possibly can. They’re in the business of delaying, denying and diminishing claims.

If you were involved in an accident and your claim was denied, contact the Chicago Legal Group for a free strategy session at 1-847-305-4105.


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