5 Most Common Reasons Why Insurance Claims Get Declined

Insurance is an essential financial tool that provides a safety net for individuals and businesses in case of unexpected losses or damages. However, just having an insurance policy does not guarantee you will receive compensation when you file a claim. There are many reasons why insurance claims get declined. Let us discuss the most common reasons why insurance claims get refused and how to avoid them.

1. Failure to Declare Health Conditions

When you apply for an insurance policy, you must disclose any pre-existing health conditions or medical history. The insurance company uses the information to assess the level of risk they are taking on by insuring you. Your claim may be denied if you fail to disclose a health condition or provide inaccurate information.

Be honest and transparent when applying for insurance to avoid being declined later. Disclose any pre-existing health conditions or medical history, even if it means paying a higher premium. Although it costs more, it should ensure policy owners can get something when the time comes. It is better to be upfront and honest than to risk having your claim denied.

2. Unpaid Insurance Premiums

Insurance policies require regular premium payments to remain valid. If you fail to pay your premiums on time, your policy may lapse, and the insurance company will no longer cover you. In this case, any claims you file will be automatically declined. Remember to pay your premiums on time. Set reminders or automatic payments to ensure that you never miss a payment.

3. Outliving the Policy

Some insurance policies, such as term life insurance, have a fixed term or duration. If you outlive the policy, your coverage will end, and you cannot file a claim. It is a common reason why life insurance claims get declined. Choose a policy with a term that matches your needs. You can also consider renewing or extending your policy before it expires.

4. Death by Suicide

Most life insurance policies have a suicide clause that states that no benefits will be paid if the policyholder dies by suicide.

Understand the terms of your policy, including the suicide clause. If you have a history of mental health issues or suicidal thoughts, disclose this information when applying for insurance. It is also best to seek medical help to prevent instances from happening.

5. Filing a Claim for Excluded Events

Insurance policies have exclusions, which are events or circumstances not covered by the policy. For example, a car insurance policy may exclude damages caused by committing an intentional or criminal act while operating a motor vehicle. If you file a claim for an excluded event, your claim will be denied. Understand the terms of your policy, including the exclusions. Contact your insurance company before filing a claim if you are unsure whether a particular event is covered.

Conclusion

Filing an insurance claim can be daunting, especially if your claim is denied. However, by understanding the most common reasons why insurance claims get declined, you can take steps to avoid them and increase your chances of receiving compensation when you need it most.

If you need to file an insurance claim, make sure you read and understand the terms of your policy before submitting your claim. Provide accurate and honest information, pay your premiums on time, and make sure you choose a policy that meets your needs. Following these simple steps can protect yourself and your loved ones from unexpected losses and damages.

If you or someone you know has been injured in an accident and needs a personal injury lawyer in Niagara Falls, look no further. Our law firm specializes in helping clients with personal injury claims, including those involving disability and insurance issues. Contact us today to schedule a free consultation and learn more about how we can help you with your personal injury claim.