Coverage Denial – My Auto Claim Was Denied and Now What?

Insurance companies will send you a coverage denial letter when they believe their investigation is complete and there are no grounds for granting coverage.

There are many reasons why an auto claim is denied. The most common reasons for denials are: non-payment of premium, the coverage is specifically excluded form the policy. The more severe. We have many more Auto Insurance Help Articles Now Available.

reasons are misrepresentation of the insurance application and fraud. If you misrepresent anything in the insurance application, then it would excuse the insurance company from performing as agreed under the terms of the policy. Most courts do not side with insureds when there are misrepresentations of material facts. Make sure that you answer truthfully when you are filling out the insurance application. If you do not know the exact answer, tell the insurance agent that you will answer once you have certainty about your answer, do not guess, it can cost you a lot of headaches.

The worst thing that can happen is that you end up with a coverage denial because you said or wrote something that can be construed as misrepresentation.

A coverage denial based on fraud usually occurs because the insured tries to inflate the value of the claim. They claim that their car stereo was equipped with DVD player when in reality it only had a CD player. Trying to inflate the claim will leave you with no coverage at all, even if there is damage to a third party. So never misrepresent your damages, because if you get caught, the insurance company will give you a coverage denial and a court of law would side the insurer.

The most common coverage denial, however, is for items specifically excluded in the policy. You need to be able to navigate and read the insurance policy to learn what is covered and what is not covered. You need to understand the declarations page, the insuring agreement, the definitions, the exclusions, and any applicable endorsements.

Note, there are other reasons why insurance companies deny coverage. The accident happened before the policy coverage period was active. The accident happened outside the coverage geographical area, the driver was specifically excluded from the policy, there was prior damage to your car, you do not have the specific coverage you are seeking (a tree fell in you car and you do not have comprehensive coverage in your car). Other important reasons for exclusions of coverage because you did not mitigated your loss, and/or did not report the claim within a reasonable time.

Remember that you have the burden of proving your loss. However, the insurance company has the burden of proof when they deny a claim. In other words, the insurance company must prove to you that the coverage is excluded, there was fraud or misrepresentation, and/or all the other reasons

noted above. Make sure they put everything in writing so you know exactly why there is a coverage denial. If you ever go to court, this will help you because courts interpret exclusions of coverage very narrowly and against the drafter of the policy (the insurance company).

By requesting all documents of the investigation, the coverage denial letter, and a certified copy of the policy, you will be setting up a case to protect yourself and seek a declaratory judgment by a court to grant you the coverage that you paid for. Review all these documents and make sure they are crystal clear. Most courts will side with the insured unless the insurer did everything by the book. Make sure they did. We have many more Auto Insurance Help Articles Now Available.