Is It Possible That Insurance Companies Will Reject a Claim?

Adjusters may deny your claim if you're negligent or don't have coverage.
i Michael Blann/Photodisc/Getty Images

When you buy insurance, you expect the insurance company to support you and pay you when you suffer a loss. However, insurance companies might refuse to pay you damages, citing various reasons. You can always appeal if the insurance company rejects your claim. If you believe your claim is legitimate, you also can take the insurance company to court. Before you rush off to file an appeal or sue, understand some of the common reasons an insurance company might reject your claim.

Limited Coverage For Homeowners Insurance

If your policy doesn’t cover the damages you’re claiming, the insurance company can reject your claim. For example, standard homeowners insurance policies often pay for damages caused by events such as fires, theft and vandalism. However, these policies often don’t cover damages caused by floods and earthquakes. They also don’t cover general depreciation. If you submit a claim for water damages under a standard homeowners insurance policy, you might receive a rejection. To remedy this, make sure you buy separate flood insurance and any other coverage that might protect your home.

Auto Insurance Claim Rejections

If you’re involved in a car accident, the driver at fault doesn’t have auto insurance and you don’t have under- or uninsured coverage, your insurance company will likely reject your claim. Allowing your policy to lapse also can result in a rejected claim. If you’re negligent while driving -- talking on the phone or driving under the influence -- your insurance company might deny your claim. Also, you need to tell the insurance company about updates you make to your insured vehicle. You might need to pay additional premiums for those updates. If you don’t tell your agent, the insurance company isn’t liable for damages to those updates.

Insufficient Proof For Disability Claims

For disability claims, adjusters need to be sure that you didn’t already have symptoms before taking the policy. They also need to see evidence such as results from CT scans, MRIs and X-rays to understand the seriousness of your injuries. They might ask for your medical records showing that you can’t work. They’ll then assess your policy to make sure it covers your particular disability. In certain cases, they might agree to pay you, but only for a limited time. Insurance investigators sometimes perform surveillance on claimants. If your activities clearly refute your disability claim, the insurer might reject your claim.

Time Denials

Insurance companies often require that you submit claims within a certain time frame. If the company rejects your initial claim, you have a time window within which you can resubmit. For example, you often have about 180 days to resubmit a rejected disability claim. If don’t resubmit within the time frame, you might not be able to get legal support for your claim. Insurers often require that you file homeowners insurance claims within a year of the date when the damage occurred. You often can file your claim for auto insurance within two to four years of the accident, but this period varies depending on the state in which you live.

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