On what grounds can an insurance company deny your claim?

When you file a legitimate claim with your insurance company you should have a reasonable expectation that your claim will be approved. In most situations, your claim will be reviewed and you will receive a fair amount to cover your loss. However, if certain circumstances are present, you may receive a notice telling you that your claim has been denied.

Whether you are talking about auto, home, life, or any other type of insurance policy, your claim can be denied if you made a material misrepresentation on your application when you were trying to get coverage. Fraud, deception and an outright lie are all legitimate reasons for denying a claim. For instance, saying that you are a non-smoker when you have been smoking two packs of cigarettes a day for the last 10 years, is a deliberate act of deception. If you die of lung cancer a few years later, your beneficiaries may have a very difficult time trying to collect on your life insurance policy.

Your claim may also be denied if you commit an intentional act that causes damage to your property. Your insurance company will deny your claim if the cause of the big dent in your car door was the result of you getting angry and kicking the door.

Another possible reason you may be told that your claim is being denied is that you fail to report the loss in a timely manner. If you back into a pole in January and wait until November to notify your insurance carrier of the damage to your bumper, chances are slim that your claim will be approved.

Sometimes a claim can be denied because the loss is determined to be outside the included coverage of the policy. If your house is flooded due to storm surge, you can only file a claim under a flood insurance policy. If you do not have such insurance and try to collect on your home insurance policy, your claim will be denied.

When you buy any type of insurance policy, be sure you understand what the policy does and does not cover. Insurance companies are highly regulated and honor legitimate claims that are covered under the terms of your policy.