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Imagine that you have filed an insurance claim only for your claim to be rejected. You’re not alone. Due to the insatiable desire of making profit, insurance companies are often involved in searching for reasons to deny the claim.
However, they also have mechanisms by which they can dismiss some of the claims as lying outside the coverage offered by the policy in question – there are also strategies they can employ to minimize, delay, or even deny the legitimate claims altogether.
In this comprehensive review, we’ll shed light on the common tactics used to deny your claims because insurance companies will use your words to deny your claim. In the end you should be empowered you to fight for the coverage you deserve.
1. Exclusions and Limitations
Imagine filing a claim, only to be told it’s not covered because of a hidden clause in your policy. Many policies contain exclusions – specific situations where coverage doesn’t apply – and limitations, which restrict the amount the insurer will pay. These can be tricky because they often use complex legalese. For example, a homeowner’s policy might exclude flood damage, or a car insurance policy might limit coverage for theft if the car wasn’t properly secured.
Your Defense: Read your policy carefully, especially the exclusions section, before filing a claim. If you’re unsure about something, don’t hesitate to call your insurer and ask for clarification.
2. Scrutinizing Your Claim
Insurance companies are like detectives when it comes to claims. They’ll thoroughly investigate the circumstances surrounding your claim, searching for inconsistencies or loopholes to use as denial reasons. This might involve requesting mountains of paperwork, witness interviews, or even hiring private investigators.
Your Defense: Be prepared to provide detailed info and documentation to support your claim. Keep all receipts, police reports, and any other relevant paperwork. Be truthful and consistent in your statements, and avoid making any admissions of fault that could be used against you.
3. Pre-Existing Conditions
Insurers may deny coverage for medical treatments related to pre-existing conditions, especially if those conditions weren’t disclosed on your initial application. Even if you mistakenly forgot to mention a pre-existing condition, it could lead to a denial.
Your Defense: Be completely honest and upfront about your medical history when applying for health insurance. If you have a pre-existing condition, make sure you understand how it might affect your coverage.
6. Disputes and Ambiguous Language
Ever read a contract and felt like you needed a law degree? Insurance policies can be just as confusing. Disagreements over what exactly is covered under your policy, or how specific clauses should be interpreted, can lead to claim denials. Insurers might argue that certain losses aren’t covered, or that you failed to meet specific requirements.
Your Defense: Don’t be afraid to ask questions! If you’re unsure whether something is covered, get it clarified in writing from your insurer before moving forward. Keep a copy of any written communication you have with the insurance company.
7. Delay Tactics
Sometimes, insurers play a waiting game. They might deliberately delay processing your claim by requesting unnecessary paperwork or extra information. The hope? You’ll get frustrated and give up, or accept a lowball settlement offer just to get some cash.
Your Defense: Be persistent but in your communication with the insurance company. Document everything, including dates, times, and the names of everyone you speak with. If you feel you’re being unfairly delayed, consider filing a complaint with your state’s insurance department.
8. Lowball Offers
When insurance companies do offer settlements, they may initially propose amounts that are significantly lower than the actual value of the claim. This tactic is designed to pressure claimants into accepting a lesser amount to avoid a lengthy appeals process or legal battle.
Your Defense: Don’t be pressured into accepting the first offer. Research the fair value of your claim, and be prepared to negotiate. Consider getting an appraisal or estimate from a qualified professional to support your claim’s value.
9. Denial by Letter
Insurance companies are required to provide written explanations for claim denials. However, these letters can be vague or misleading, filled with legalese and technical jargon. Don’t assume the denial is justified because it sounds official.
Your Defense: Carefully review your denial letter and highlight any confusing or unclear language. If you don’t understand the reason for denial, contact your insurer for clarification. Don’t hesitate to seek legal advice if you believe the denial is unfair.
10. Litigation and Appeals
If your claim is denied, you don’t have to simply accept it. Most policies allow you to appeal the decision through an internal process with the insurance company. If that fails, you may have the right to take legal action. This can be a complex and expensive process, so it’s important to weigh the costs and benefits before proceeding.
Your Defense: Gather all documentation related to your claim and denial. Consider consulting with an attorney specializing in insurance law to discuss your options. Be prepared for a potentially lengthy battle, and understand that legal fees can be significant.
11. Selective Medical Evidence (Health Insurance)
This is a sneaky tactic used by some health insurers. They might focus on specific parts of your medical records that support their denial, while ignoring evidence that strengthens your claim. This could involve using biased medical experts or downplaying certain diagnoses.
Your Defense: Request a copy of all the medical records the insurer is using to base their decision on. If you disagree with their interpretation, consider getting an independent medical opinion to support your claim.
12. Recission
This is a drastic measure, but some insurers may try to retroactively cancel your policy altogether, known as rescission. They might claim you misrepresented information on your application, even if it was unintentional. If successful, this could result in the denial of any pending claims and leave you without coverage.
Your Defense: Be honest and accurate when applying for insurance. If you have any questions about what information to disclose, consult with your insurance agent. Keep copies of your application and any communication with the insurer.
13. Inadequate Communication
Sometimes, miscommunication is the culprit behind claim denials. A lack of clarity regarding policy coverage, claim procedures, or required documentation can lead to misunderstandings and unnecessary denials.
Your Defense: Don’t be afraid to ask questions! If something is unclear, get clarification from your insurer in writing. Keep detailed records of all your communication with the company.
14. Settling Under Duress
When you’re facing financial hardship after a loss, insurers might try to exploit your vulnerability. They may pressure you into settling your claim quickly for a much lower amount than it’s worth.
Your Defense: Don’t settle under pressure. Take the time you need to understand the full value of your claim. Consider seeking legal advice before negotiating a settlement.
Final Thoughts
By familiarizing yourself with the tactics insurance companies use to deny claims, you’ll be better equipped to navigate the claims process and fight for what’s rightfully yours. Don’t be afraid to ask questions, document everything, and be persistent in your communication.
However, there are times when even the most prepared policyholder might need some extra muscle. If your claim faces an unfair denial, or the process becomes overly complex, consider consulting with a personal injury attorney specializing in insurance disputes.
An experienced attorney can help you understand your rights, interpret your policy, and negotiate a fair settlement. They can also represent you in court if necessary.