Top 5 Rejection Reasons for Auto Insurance Claim

Auto insurance is meant to protect a person’s financial stability if they’re ever in a motor vehicle accident.  Unfortunately, just like any other type of insurance, these claims can be denied.  When this occurs, it can leave a driver on the hook for an excessive amount of money.  This makes it imperative for every driver to understand the most common reasons car insurance claims are denied. 

Lapsed Policy

Lapsed Dallas Auto Insurance policies are one of the most common reasons that a claim will be denied.  This can be a simple mistake on the part of a driver.  Most people have trouble remembering everything in their daily lives, but failing to pay their motor vehicle insurance premium can be far more detrimental than other mistakes.  It’s often a good idea to set up an automatic payment plan to avoid this. 

Damages exceed Coverage

Everyone has seen the commercials on television that offer people the option of state minimum coverage auto insurance.  Unfortunately, this can leave drivers in hot water.  If a person only has $15,000 in property damage coverage but their accident causes $50,000, that driver must find a way to pay the other $35,000 themselves.  This can financially ruin a person. 

Driver not on Policy

Many people believe that their car insurance policy will cover anyone who drives their vehicle, but this is definitely not the case.  A driver who isn’t on a person’s car insurance policy is basically an unknown risk to the insurance company, and they aren’t in the business of providing protection for risks that they cannot foresee.  If someone who isn’t on the insurance policy is involved in a wreck, the company will likely pay nothing. 

Oversights              

Another of the most common reasons for car insurance claim denials is simple oversights.  A person who files an uninsured motorist claim, for instance, will likely be denied if the other driver did have some form of insurance.  These mistakes seem simple, but they can be incredibly time consuming and damaging. 

Inaccurate Information

A fifth common reason for car insurance claim denials is inaccurate information on the policy.  A person who is listed on their policy as living in one area who is really living in another, for instance, creates another unknown risk for an auto insurance company.  Any information that is inaccurate on a policy can cause issues for the insurance company and the policyholder, but mostly for the policyholder.  This makes it imperative to always update information on a policy as it changes. 

Any of the aforementioned reasons can cause a person’s auto insurance claim to be denied.  This is unfortunate considering the fact that all of these instances can easily be avoided.  It’s important for all drivers to understand everything about their policies and to keep them as up to date as possible.  This will ensure that there are no unexpected surprises after the filing of a claim. 

If you want to avoid these common causes of car insurance claim denials, call an All About Insurance agent today at (817) 589-0006 and we can help you out.