When a person purchases an insurance policy, they often assume they are covered for anything that may go wrong. However, their claim can be denied by the insurance company and there are options to challenge the decision.
Denial reasons
There are several reasons an insurance company may deny a claim. One of the most common reasons is that the policy does not provide coverage for the event that caused the claim. Also, if the policyholder did not pay their premiums on time and in full, it can cause the policy to lapse. This means that a claim made after the policy lapses will be denied.
If the claim is not filed in a timely manner or if it is missing documentation, it may be denied. A claim may be partially denied if the claim exceeds the coverage limits. The insurance company may pay up to the limit in the policy and deny the remaining amount.
Challenging the denial
When a claim is denied, the insurance company will issue a letter explaining why it was not covered. It’s helpful to review the policy to understand the denial reason.
The policyholder can contact the insurance company and ask whether they received all relevant documents for the claim and ask about their appeals process. The policyholder can submit a formal appeal to the insurance company with a statement of disagreement and supporting information.
Under some circumstances, there may be an option to request an external review if the internal appeals process with the insurance company is not successful. There is support available for policyholders who need help with the appeals process.