Welcome, readers! This is Abri News, where you’ll find helpful policy information to assist you in finding the best coverage for your needs. We cover a variety of topics here, including insurance plans, types of coverage, claim adjustments, conditions and clauses. Our agency aims to pair individuals with the best insurance package for their specific needs, which is why we carry every type of insurance you can imagine. From homeowners’ insurance to workers’ compensation to pet insurance—we have you covered! It’s our job to shop around, compare rates, and set you up with the level of coverage you need to feel safe and secure. Our clients enjoy our one-on-one approach and attention to detail. For testimonials, information about our services, or to request a quote, take a look around our website!
Our last article was a magnum opus dedicated to the necessity of insurance. With an array of insurances available for every conceivable valuable we possess, it can be difficult to know which are worth investing your hard-earned money. Of course, with rising healthcare costs, allocating a portion of your monthly income for health insurance is advised. As well, car insurance and workers’ compensation are mandatory in many states. But what about the rest? Is life insurance necessary? Does renters’ insurance make a difference? The answer is: The necessity of certain types of insurance depends solely upon your unique situation. That’s why we took the time to outline why certain forms of insurance may be more necessary for you than others. If you’re currently on the fence about adding another form of insurance to your monthly bill, check out our last article for reasons you may be better off insured!
Given the purpose of insurance and the continuous responsibility of paying monthly premiums, many individual’s worst fear is their claim being denied during their time of need. In our article, ‘Insurance Policy Clauses You Need to Watch Out For,’ we broke down intricacies of insurance agreements, including how to interpret exclusions and conditions. In this article, we also highlighted a few exemptions which might void an insurer’s obligation to pay a claim. We certainly hope you’ll give our previous article a read, as the information there acts as a good precursor for what we’ll cover today.
Insurance claims can be denied for a number of reasons. In order to ensure you have the best chances of your claim being fulfilled, we’re going to go through common reasons insurance claims are denied. If you’ve done everything as indicated in the insurance agreement and your insurance provider is still refusing to pay your claim (or failing to pay in a timely manner barring extenuating circumstances), then we’ll give you a few steps for how to proceed. At the end of the day, your insurance provider has a duty to fulfil their obligations to you, as stated in the insurance agreement. If they do not, there are still options for recourse.
Exceed Time Limitations
Many insurers include a statute of limitations, or a filing window, beyond which a claim can no longer be filed. For example, after a car accident, you may have between twenty-four hours and several weeks to submit your claim. If you allow this time period to lapse, even by a day, your claim can be denied. In general, it’s better to report an accident on the same day the accident occured.
Claim Submitted Within Contestability Period
With most life insurance policies, there’s a contestability period, usually spanning one or two years. During this period, in the event the policyholder dies, the insurer will take extra time to reevaluate if the insurance agreement was upheld before paying the death benefit. This includes ensuring the original application for coverage was correct, no medical conditions were misrepresented, and there is no foul play concerning the death of the policy holder. Even if the policyholder misrepresented a fact which had nothing to do with their eventual death, this can be cited as a reason to deny paying a death benefit. When a death benefit is denied, the insurer will return the full amount of premiums paid by the policyholder to the beneficiary.
Insurers may refuse to pay for accidents or damage which they determine as “avoidable.” For example, if you are under the influence and damage your car while driving, many insurers will cite your intoxication as reason to deny your claim. You should never drive under the influence. You should read your insurance agreement thoroughly to determine whether there are certain actions which, when undertaken, void your policy.
In some instances, insurers will pay out a claim but fail to pay the full amount. If damages incurred in an accident are substantial, the insurer’s only obligation is to pay up to the policy limit. Likewise, certain policies only cover certain types of damage. For example, many homeowners’ insurance policies cover damage to the home in the event of a storm, but fail to cover damage resulting from flooding. The exclusions section of your insurance agreement will detail all of the exemptions to your policy. (We cover the difference between named-peril agreements and all-risk coverage agreements in our ‘Insurance Policy Clauses to Watch Out For’ article.) In the case of life insurance, insurers may contest claims arising from death by suicide (including death by drug or alcohol use). In the case of car insurance, a claim may be denied because the person driving at the time of the accident was not an insured. Most insurers also include clauses which void a policy if the policyholder was involved in illegal activity when they died or were in an accident.
Many insurers will add a condition to the insurance agreement stipulating the policyholder must cooperate with investigations following a claim being filed. Failure to respond promptly to enquiries, provide requested documentation, or disclose information relevant to the case can result in a delay in payment or altogether denial. Nondisclosure in general is a surefire way to receive a denied claim. Common pieces of information you should report to your insurer are: prior insurance claims, criminal offences, and existing damage.
Fraud is another surefire way to ensure an insurance claim is denied. Fraud is the willful deception of an insurance company for financial gain. If you forget to disclose a minor detail on your application or you do not disclose something you were not aware of at the time—do not worry. Fraud requires you to lie (i.e. stage an accident, take out an insurance policy on something you plan to destroy). While minor mistakes may result in long term delays in payment, fraud will almost certainly result in a firm denial of benefits. And, perhaps, jail time.
Unfortunately, certain insurers are not interested in upholding their duty to policyholders and will deny legitimate claims in an attempt to keep profits. This, and any other attempts by insurers to shirk their responsibilities to policyholders, is referred to as “bad faith.” When you suspect an insurance company of acting in bad faith, your first course of action should be to discuss the issue with your insurance company. This may seem pointless, especially if you’ve been struggling with their method of handling your case for weeks. However, accusations of bad faith are quite serious. Most insurance companies do not wish to be seen as acting in bad faith and will do their best to provide a basis for their denial. After presenting your evidence against theirs, if you are unable to come to a resolution, your next course of action is to contact your state’s insurance department. After the department has collected your information, your case may be chosen to be reviewed further. If nothing comes of this, you can reach out to an arbiter or attorney to discuss further courses of action.
No policyholder or beneficiary should be denied relief if they’ve acted according to their insurance agreement and kept up with their premiums. We hope the information shared here today paints a clearer picture of the responsibilities levied on both you and your insurer. Make sure you read your insurance agreement from top to bottom, ask plenty of questions, and negotiate the details to reflect your desired amount of coverage. If you need help finding the right insurance policy for your needs, reach out to us! Everyone here at Abri Insurance is eager to assist you in your search for the best coverage. Come back here to read the latest news and discover more about how to make the insurance industry work for you! Thanks for reading! Until next time!