You received a coverage denial letter in the mail after an auto insurance claim; So why has the auto insurance company done this and how can you make sure it doesn’t happen to you when you go to claim your auto insurance?
First, your auto insurance company will issue a denial letter if they complete the investigation of your claim and determine that there is no basis to pay the claim. The most common reasons for issuing a claim denial generally include; the claim is covered by a policy exclusion; non-payment of premiums has expired the coverage of the policy; not disclose important information when applying for insurance coverage; and equally serious, a fraudulent claim.
By far the most common basis for denial is because the claim is covered by an exclusion clause in the policy. You can help yourself by making sure you know what your policy excludes before you drop coverage. This is where comparing auto insurance policies is a useful skill and is by no means easy to acquire. However, once you have the policy in place, you should be able to navigate the policy conditions and exclusions to minimize the risk that an incident is not covered.
The most serious reasons for denial of coverage are misrepresentation and fraud. Misrepresentation of the facts in your insurance application will invalidate the policy and you will not be covered; at best, all you’ll be entitled to is a refund of your premiums and, at worst, liability for damages caused, which can run into the tens of thousands or more.
Fraud is very serious, as it is often a crime and has implications for insurance coverage. Claiming an in-car DVD system when you just had a basic radio, adding items that were not in the car when it was stolen, or increasing the value of your vehicle above what it was actually worth are all good examples of insurance fraud. In fact, most insurance fraud is easily detected, but the ramifications are dire;
When discussing the claim with the insurance investigator, never say anything about which you are unsure. If you are asked to provide an immediate answer to an investigator’s questions, simply advise that it cannot be completely accurate and that you will answer when it can be as accurate as possible. Never sign anything you don’t understand; This is good advice for a number of reasons, including that an insurance company will seek to minimize the dollar amount of the claim (as it directly reduces your earnings) and limit any potential liability for the accident or claim, for example, if you have a accident however Solo developed health problems related to the wreck several months later. If you signed a waiver, you have no basis to reopen the claim and you will not be covered. Always ask that questions and inquiries be dealt with in writing so that you can create a record of what has been discussed and any mutual understanding in case you have to go to court; Remember that you will have the burden of proof to prove your claim, but the insurance company will have the burden of proof to show that they have denied your claim correctly.
Never admit responsibility or that anything that happened was your fault. In most cases, this voids your coverage!
