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Why Insurance Claims Are Denied – 5 Reasons To Help You Understand

Nothing can be scarier than when your medical bills pile up and you suddenly learn that your health insurance company will not pay. Denial of insurance claims is not an uncommon practice. Millions of claims are rejected every year and there are a range of reasons why an insurance provider denies a claim. It is critical that you understand why your claim has been denied. Denial of insurance claims is a nightmare which can panic any policyholder. Before you fear sinking into a black hole of debt, find out reasons why your claim may be denied.


Providing incomplete information
One common mistake which life insurance consumers can make is allowing insurance agents to fill the form on their behalf. Stop viewing the form filling process as a cumbersome and time consuming process. It is best to fill the form yourself where you will be sure of the details you provide instead on depending on the agent. It is important to note that insurance policies get issued on the basis of details which you provide while filling the proposal form. Your claim will be rejected if you do not provide complete information. If you have withheld information, chances are higher that your insurance claim will be denied. In cases of health insurance, at times individuals do not provide details of previous medical illness. Suppressing the facts while purchasing a cover is not a good idea.

Lying while claiming
Many a times, claims are reported dishonestly. The purpose of the insurance is to protect and it should not be used to gain a profit. Many claims are rejected because applicants falsify information. If the agents find something amiss, they will immediately investigate the claim. This may not only lead to the insurance claim being denied but may lead to serious legal implications. You will run the risk of spoiling your record by falsifying insurance information. A black mark on your record will make it difficult to regain a policy in the future.

Not paying premiums on time
Insurers settle only those claims which are active. It is very important that you pay the premium on time. An insurer will not settle a claim if your policy has lapsed due to unpaid premiums . If you miss paying a premium on time, ensure that it is paid within the grace period before a policy lapses. Premiums paid even a day after the lapse will lead to rejection of the claim. Not acting quickly can delay the process of receiving money which may raise doubts in the insurer.

Failure to provide evidences
Providing sufficient evidences adds value to your claim making it stronger. If you do not provide proof of damage it can result in rejection of the claim. It is advised that you take snapshots of damage and the surroundings if you want the insurer to trust your claim. Keep the receipts as a proof of ownership which will act as sufficient evidence in future. Providing genuine proof will make the claim process as smooth as possible. Straight after an incident start by writing your own version of what actually happened because it is easy to forget the small details. Types of documents an insurer can ask for includes:

  • Original receipts
  • Original police reports
  • Valuation reports
  • Medical certificates
  • Product make, model and serial numbers
  • Photographs or videos of property or items, or the event itself

Keep all notes, supporting materials and paperwork in a folder. Taking videos and photographs can prove very useful when it comes to furnishing evidence for an insurance claim.

Claims lost by the insurer
Heaps of claims lie at with an insurance company. There can be a possibility that the insurance company has lost your claim and it has not been reported in their database. This can lead to rejection of the claim. In such cases the only solution left with the policy holder is to take prompt action before the deadline for filing the claim is over. A good practices is to keep copies of the proofs submitted.

Hence, if you need a claim act quickly without being followed up by the insurer.. Make the claim quickly when the details are fresh in your mind. The insurer will not need to chase up for additional information. If you delay in making a claim, it will only make the process longer. Insurers are most likely to ask you why it has taken you so long.

5 ways you can ensure that an insurance claim is not denied:

1.Don't suppress vital information
2.Fill-up the form yourself
3.Don't let the policy lapse
4.Verify policy document

5. Don’t falsify insurance information

 

 

Written By: PolicyBazaar - Updated: 09 June 2020
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