We naturally want to believe that our insurers will not mess us around when we have a claim and pay quickly. This is usually the case and companies pay claims in due course and keep their policyholders happy. Sometimes, companies may even pay claims that they could dispute. They choose to pay the money to keep customer happy and avoid having bad publicity. This is more likely to be the case when claims are smaller.
There are cases that companies may refuse claims. These incidents are not uncommon in the industry. Policyholders cannot be right all the time and sometimes they may be expecting too much from their policies. Companies may have a good reason for declining a claim but policyholder may not agree with their decisions. Some of the obvious reasons are;
– you don’t have coverage for the claim you are making,
– you didn’t pay your premium in time and therefore the policy lapsed at the time of the incident that lead to claims.
– you didn’t fulfill your duties of care and neglected your property to a point that lead to claims.
– you were using your vehicle beyond the scope of your policy. This could be unauthorized business use or
– you sustained the damages while you were conducting an illegal act
– the driver that caused the accident was not insured to drive your vehicle
– you didn’t tell them the whole truth about yourself, other drivers or any modifications on cars.
This list can go on much longer than here. Any of the above can be a legitimate reason for denial.
Your first step would be to find out the exact reason why you are being turned down. This will allow you to check the relevant sections of your policy and see if you have any grounds for appeal. Then you will need to make a strong case and ask the company to have a look at the claim again. The appeal process would be clearly explained in your policy or they would have send information about it when they send the denial letter.
Ideally, you want the appeal process move quickly. If the appeal process bear fruit and company agrees to pay your claim it would be great and end of the matter. They may come back and agree to pay a partial settlement but you may have to accept it as full settlement and agree not to pursue the issue anymore.
In some cases you may be allowed to go for arbitration. In that case, a third party would look at the claim, listen to the arguments raised by you and the insurer and make a decision. It is likely that decision made by the arbitrator would be final. You have to check and understand that you may be giving up your right to sue the company by accepting arbitration route.
Perhaps you may want to pursue your claim in the courts and you need a legal advice on that. Keep in mind that taking your insurer to court can be a costly process. You shouldn’t start the process without getting quotes from lawyers. In some cases, lawyers may agree working on the bases on no win no fee. They have to believe that they can win the case if they will go this route. You need to discuss your options with a lawyer.