5 common reasons insurance companies deny a car crash claim

On Behalf of | Oct 3, 2014 | Denied Insurance Claims

While a person with auto insurance may cry foul if his or her claim is denied, there are many legitimate reasons for an insurance company not to pay on a claim after a car accident. Many of these reasons have to do with the policy holder breaking the law, or not realizing that they are not covered for what happened.

Despite not being entitled to payment, many clients will choose to litigate a denied insurance claim. The insurance company will need to have experienced legal defense help during the proceedings.

According to Fox Business, five common reasons for denying a car insurance claim are:

1. Fraud. A person who exaggerates the extent of the damage to their vehicle, or completely invents a claim, is not entitled to payment. In fact, insurance fraud is a crime.

2. Lack of coverage. Many insured people do not know the details of their policy. They may file a claim for an incident they are not covered for.

3. Not communicating with the insurer. A car owner needs to notify the insurance company of any modifications or improvements to the vehicle that increases its value. The cost of the premium may go up, but the policy will then reflect the vehicle’s true value. Otherwise, the policy will only cover its original value.

4. Missed premium payments. If the customer misses a payment, his or her policy could be suspended when the accident occurs.

5. Drunk driving. Many states allow insurance companies to deny a car accident claim if the claimant was intoxicated at the time of the accident.