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Why Do Insurance Companies Deny Policy Benefits?

Picture: Vlad Deep

It’s easy to assume that you’re automatically covered for a car accident when you take out a vehicle policy. After all, you pay a premium and expect your insurance company to be on your side. However, that doesn’t always happen, and even after years of paying premiums, your insurance company might still deny your claim. While tens of thousands of people have their claims approved without issue, some are declined for the following reasons.

Bad Faith

Top legal experts like Yegendorf Law Firm have worked with many clients who have been the victims of bad faith insurance. Bad faith insurance describes an insurance company trying to get out of its contractual obligations by misconstruing insurance language to policyholders, not disclosing policy limitations, and making policyholders jump through unreasonable hoops to prove losses. While many states have now put laws in place to stop consumers from being affected by the bad faith of insurance companies, some still use many poor tactics to deny claims and policy benefits.

You’re At Fault

If you submit a claim with an at-fault driver’s insurance company after an accident, your claim might be denied if the insurance company deems you were at fault. They might have interviewed the driver, listened to a recorded statement you gave them, read police reports, and analyzed scene evidence. With this information, they might not think their policyholder was to blame. If you don’t believe you are at fault, you might need to submit a claim with your insurance company and file a lawsuit to fight for compensation for your injuries, accident-related stress, and other costs.

You Missed the Claim-Filing Deadline

The claim-filing deadline can vary for each state, but most insurance companies require you to file a no-fault claim within 30 days of your accident. While you might think you only need to file a claim with the at-fault driver’s insurance company, it can be worth submitting one to your own insurance company at the same time. Contact a personal injury lawyer if you’re unsure how the claims-filing process works or want to ensure you’re in a strong position for a personal injury claim. They can negotiate with insurance companies on your behalf.

Your Policy Lapsed

Insurance company representatives’ hands are tied when your policy has lapsed. Even if your claim is one they would typically accept based on the events of the situation, they must deny it if your policy has expired because you haven’t been paying your premiums.

While you might assume you can make an insurance payment after the accident to keep it active and make a claim, it wasn’t a live policy at the time of the accident, which means they don’t have to pay for your vehicle damage and related costs. Alongside not receiving coverage for an accident, you might also find that your insurance rates jump by an average of 5.7% for letting your policy lapse in the first place.

Insurance companies deny policy benefits for many valid and invalid reasons. If you’ve been involved in a car accident, you might see the value in contacting an expert lawyer to negotiate and communicate with insurance companies on your behalf. Lawyers can do their best to fight for your right to coverage when your insurance claims have been unfairly declined.