We all buy car insurance to protect us financially in the event of an incident. However, there are times where your car insurance claim can be declined. This may come as a shock to some policy owners who think that insurance is a blank cheque. While the reasons your insurance claim was denied might be few and far between, they do exist and you should know about them. In this article, we’ve collected the most common reasons why an insurance claim can be declined.
1. Policy limit or insufficient coverage
It’s important to know the in-depth details of your car insurance policy. One of isure’s certified insurance brokers can help explain the small print of a policy to you. In some cases, your insurance package may not include a particular type of coverage. This is especially true if you lack comprehensive coverage for things like vandalism or fire. Other reasons can be if you hit a limit on your policy. Let’s say your property damage coverage limit is $50,000. If you got into an accident causing $100,000 in damage, your insurance claim will be denied due to the policy limit.
2. You missed a payment
Always ensure that you pay your car insurance premiums on time! Missing a payment by even a few hours can mean that the insurer denies your claim. The best way to avoid any potential issue is to make monthly payments automatically. Or better yet, pay your insurance in one yearly lump sum if possible. By paying annually, you can save money on your car insurance!
3. Misinformation or failing to disclose information
When you submit your details to your insurer, it’s crucial that you are honest. One reason as to why your insurance claim was denied can be if you fail to disclose important information. For example, it can be an incorrect address or forgetting to disclose a nitrous oxide engine. When providing your information, share everything from existing damage to previous claims made. Otherwise, you risk having your insurance claim denied.
4. Using your car for business
If you use your car for deliveries or services such as Uber, an insurance claim can be denied while on the job. Personal car insurance policies are for regular usage, and not for business use. If you plan to use your vehicle for business purposes, speak with one of our isure brokers today to ensure proper coverage. We’ll compare rates from top insurers to find coverage for both your personal and business use.
5. Driving with a suspended licence
If your license is suspended for any reason, do not get behind the wheel. An insurer will be well within their right to deny your claim if you’re driving illegally. This can extend beyond suspended licenses as well. If your claim is connected to a crime, an insurer can also deny coverage.
6. Liability disputes
Disputes regarding who causes an accident can explain why your insurance claim was denied. If it is proven that the other driver is at-fault, your claim will likely be approved. However, if you are found to be solely at-fault, your insurance claim can be denied.
7. You didn’t notify your isure broker or insurer quickly
It is very important to notify your isure broker or insurer after an accident as quickly as possible. Depending on the situation, not informing your insurer quick enough can explain why your insurance claim was denied.
8. You have missing documentation
When processing a claim, insurers need all relevant documentation in relation to the accident. Documents can include invoices for the car, your driver’s licence, or evidence of the accident. If documentation isn’t submitted in a timely manner, you can risk denial of a claim.
9. The driver doesn’t have coverage from your policy
If the driver with involvement in the accident doesn’t have a good driving record, the claim can be denied. Additionally, even if this driver isn’t the owner of the vehicle or the policy, this still proves true. Always discuss details of your policy with your isure broker and ask any questions you may have!
10. The policy doesn’t cover everything
In Ontario, specific collision coverage is an add-on and not automatically included when purchasing a car insurance policy. So, if you have gotten into a car crash, your policy may be denied.
Speak with a member of our isure team to learn more about your car insurance policy or why your insurance claim was denied.