Tips & Tricks – Insurance Coverage – 6 or 7 Ways To Have Your Claim Denied
June 1, 2011
I would add: talking too much and giving too much information to the insurance companies. Generally, adjusters are well trained to ask all the right questions and questions to which they need an answer. The best practice if to let the adjuster ask the questions and answer those questions with short, thoughtful and complete answers.
Here are six things you may do that can result in your insurance company refusing to foot the bill for your claim.
1. Filing a fraudulent claim
Tempted to pretend that old jalopy has been stolen so you can collect the car insurance money? Think it’s harmless to exaggerate the extent of your damages in order to collect a few more dollars in your insurance payout?
If you file a fraudulent or exaggerated claim and your auto insurance company finds out, your claim is sure to be rejected.
“Committing insurance fraud is a felony,” says Amy Bach, executive director of the consumer advocacy group United Policyholders, which concentrates on insurance matters. “Knowingly committing a fraud is always grounds for denial of a claim.”
2. Filing a claim for coverage you don’t have
Often drivers don’t understand their coverage, which can lead them to try to make claims for coverage they don’t have.
For example, did you hit a deer? You don’t have coverage unless you bought comprehensive insurance.
Or perhaps you took you hit a slick patch in the road and slammed into a corner mailbox. Any damage to your car will not be covered unless you purchased collision insurance.
3. Expecting coverage for a loss excluded in your policy
You will not be covered for any loss that is excluded in your policy.
For example, in some cases, a car insurance policy may not cover you for business-related use of your vehicle. So a claim for a fender-bender that occurred while making a work delivery could be denied.
4. Increasing a car’s value without telling the insurer
When you increase the value of your car, you may not be covered for the full extent of damages if you haven’t notified your insurer of the upgrades.
“If you do any heavy customization or special modifications to the wheels or body of your car, it’s important to notify your agent immediately,” says Rick Ward, director of auto claims for MetLife Auto and Home.
You may be charged a higher premium to reflect the increased value of your vehicle. If you haven’t notified your car insurance company of improvements by the time you file a claim for damages, you will likely only receive compensation for your vehicle’s original value.
5. Letting your policy lapse
Even if you’ve faithfully paid your auto insurance premiums for decades, a missed payment could jeopardize your coverage.
In this case, your insurer may suspend your auto insurance coverage until you are up-to-date on payments. The results could be disastrous if you’re involved in an accident before your insurer has reinstated your policy.
“If you have a lapse in your policy, you’ll have no coverage and will be forced to pay for the full extent of any damages yourself,” says Ward.
6. Driving under the influence
Getting into an accident while under the influence of drugs and/or alcohol is generally an excluded coverage and the insurance company likely will deny coverage.