Just because you have an insurance policy does not automatically mean that you will receive a payout in the event of an adverse occurrence. The insurance company where you file a claim at may deny your claim. If you know why your insurance policy will deny a claim, you will be in a better position to ensure you are within the bounds of their terms and conditions so that you receive a payout in the event you file an insurance claim. These are usually found in the fine print of your policy and you should make a point of reading them. Top reasons why an insurer may deny your claim include:
When you lie to your insurer in any way with regard to your policy, either when you were getting it or when an insurable event happens, that is enough ground for them to deny your claim. Depending on the severity of your lie, your policy may be cancelled altogether. For example, if you get disability insurance based on a purported injury and it is later found out that you were not injured or the extent of the injury was not as severe as you initially claimed, your insurer is within legal bounds to stop making payments to you for the same. They may also rescind the policy. Some misrepresentations are punishable by law and you may face prosecution once discovered.
If the event is not insurable as per your policy
Every insurance policy has exclusions as to what it will not cover. For example, you may have life insurance taken out against a family member but the moment they commit suicide, the policy will lapse. If you have health insurance and want to undergo a cosmetic procedure, if the condition you are trying to fix is not considered life threatening or medically beneficial, your claim may be denied. So are procedures that are considered to be experimental in nature even if they may save your life.
Inability to prove liability
If for example you are involved in an auto accident, the police will determine who is at fault. The insurance agency will also check to make sure that the driver was fit to drive that vehicle. If you file a claim against an insurance company for damage to your vehicle by a person that they have insured, they may deny the claim if it is found that their party was not to blame for the accident or that you were not authorized to drive the vehicle.
If you have surpassed the statute of limitations
Statute of limitations is the timeframe with which certain laws apply. Once the statute of limitation expires, you are unable to legally seek any compensation or retribution. Just like in the legal fraternity, insurance statutes vary from state to state and it is good to know this way in advance. It is best to file a claim as soon as possible so that you are within the stipulated statute of limitations that has been set by the state in which you reside.