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insurer turn down claim

Why would my insurer turn down my claim?

by constructaquote - 16 September 2016


Small business claims do get rejected and when it happens to you it can be devastating. Many small business owners appeal and are sure there must have been a mistake but unfortunately, in many instances, the mistake is on the part of the company, not the insurers.

It is possible for insurance companies, like any business, to make mistakes but most declined claims have valid and in some cases avoidable reasons for being turned down. Here is a closer look at some of the most common reasons why your insurer may turn down a claim and tips for ensuring they don’t.

1. Timing
Most insurance companies have a set time in which a claim must be filed, as quick action will keep the cost of claims down. If your claim wasn’t filed on time, then the company have every right to reject it, as they may feel their position has been prejudiced. It’s worth familiarising yourself with your insurance companies protocols and acting sooner rather than later should you need to submit a claim.

2. Specificity
When answering questions or submitting documentation to your insurers you need to be accurate with the information and specifics of the claim, as confusion and inaccurate details could see it rejected. The more detail and specific information you include the better. Your claim report should clearly and objectively make the case for your loss to be paid. Insurance experts have consistently stated the importance of specificity in claims as it assists them the make the correct decisions.

3. Omissions
If you decide to leave any information out when making a claim and the insurer finds out, you run the risk of your claim being turned down. An insurance company has the expert experience, knowledge and access to shared databases to identify omissions and will clearly see where gaps have been left. So always ensure you include every last piece of evidence and detail you have, even if you think it may be unimportant.

4. Limits
It is important that you review your cover and any sums insured on a regular basis otherwise you could find that you have become underinsured. In this situation, when a claim arises the insurers will apply “average” to the claims settlement. This will result in the amount of the loss, i.e. the claim settlement, not being fully met and you will unfortunately suffer the difference.

5. Fraud
This isn’t one of the most common reason claims are turned down but it is important to consider the severity of giving false information to an insurance company. However, if you’re sure that you have done everything officially and by the book it probably isn’t the case for you. Insurance companies spend considerable time and effort trying to verify claims and if they suspect any kind of fraud the claim will be rejected and further investigation will take place.

Always exercise care in submitting an insurance claim. Make sure you are recording everything to the best of your knowledge and providing full and accurate details to your insurer.