Auto insurance is a necessary part of everyone’s lives. With the rate of accidents in the US rising every year, and the cost of auto insurance policies rising, driving without a proper vehicle insurance policy would be foolish. Car accidents are expensive, and you do not want to pay the total amount all by yourself. This is where car insurance policies come in.
You get in a car accident, make an insurance claim (if you have the right policy for it), the claim gets processed, and you get the coverage amount. While it may sound very quick and simple, the actual process can be a little tricky. There are many reasons your auto insurer can reject your claim and leave you in the middle of financial debt. So how do you avoid being in that position?
In this article, we’ll look at all the mistakes you should avoid, and the reason that could lead to auto insurance claim rejection. Avoid these mistakes at all costs because even if you are not at fault, and the mistake was an honest one, the insurance company won’t entertain it.
Policies and their Coverage
Before you make any auto insurance claim, you must be aware of all the different types of policies and their coverages. Let’s look at all the different types of auto insurance coverages in brief.
Liability Coverage: Liability coverage cannot be claimed by you. But you need to have it. Every state in the US except New Hampshire and Virginia needs all the drivers to carry liability coverage. Liability coverage covers your liability in a car accident.
If you get in a car accident and it was your fault, you are liable to pay for the costs of the accident of the other driver. In this case, the other driver can claim your liability coverage. The opposite applies when the accident is the other driver’s fault, i.e., you can claim his/her liability coverage.
Collision Coverage: Collision coverage covers the cost of repairs to your car, irrespective of whose fault the accident was. Get in a collision accident with another car or a tree or anything and you can claim your collision policy to pay for the repairs of the car.
Comprehensive Coverage: Often called the “sister of collision coverage”, this policy covers the cost of repairs needed for accidents that may happen when your car is parked. For example, a tree falls on your car, or the car gets damaged due to fire, earthquake, hailstorm, etc.
Comprehensive coverage also covers damages due to vandalism, riots, animals, and theft.
Personal Injury Protection: This policy covers the cost of medical treatments needed after a car accident. 12 states have made it mandatory to carry this policy to legally drive a car.
Uninsured/Underinsured Motorist Coverage: There are over 32 million drivers who are uninsured in the US. If you get in a car accident with a driver who does not have liability coverage, you can claim your UM/UIM policy and get reimbursed for the cost of the accident.
Why Your Claim Might Get Rejected
Now that we know the different auto insurance policies and what they cover, let’s look at the fine and easy-to-miss terms and conditions all of these policies have that you need to follow if you do not want to get a rejection when you need the insurance money.
Driving Under the Influence
Affected Policies: Collision Damage Waiver, Liability Coverage, Personal Injury Protection Plan.
Rejection of insurance claims when you get in an accident while driving under the influence is a murky area. It depends on the auto insurance company if they accept or reject your claim if you were driving while intoxicated or under the influence of any drug.
It all depends on the “intentional cause” of the accident, where the insurance company might claim that driving under the influence was the driver’s intention. The claim that you knew about the risks of driving under the influence and yet chose to do it would get your claim rejected.
But if somehow you managed to prove that it wasn’t intentional, your claim can be accepted. But this takes time, good lawyers, and a lot of money. The best way to avoid such issues and ensure a smooth insurance claim process is by avoiding driving under the influence.
No Official Police Report
Policies Affected: Liability Coverage, Collision Coverage, Personal Injury Protection, UM/UIM, Comprehensive Coverage
Almost every auto insurance claim requires you to have an official police report about the accident. Whether it’s hitting another car, or getting your car stolen, in any car accident that you get in, report it to the authorities. This is so that the car insurance company knows it’s not insurance fraud.
When you make an insurance claim, the car insurance company will ask for a police report or ask if the accident/theft was reported to the cops. If you deny, the company can reject the claim based on possible insurance fraud. So the first thing to do after you get in an accident is to inform the cops and then the insurance company.
Policy Limits
Policies Affected: All the Policies
Your car insurance policies (collision, comprehensive, etc) have a coverage limit. This is the maximum amount of money you’d get for an insurance claim. A higher coverage limit means you’d get a higher amount, but that also means you’ll have to pay more for the insurance and premiums.
Different states have different minimum coverage limits. For example, if you live in Texas, the coverage limit there is 30/60/25 for liability coverage. This can make the insurance policies a bit expensive. Look for the cheapest Texas car insurance to get better coverage at low prices.
If the cost of an accident exceeds your policy’s coverage limits, the insurance company will not pay the extra amount. You’ll have to pay the extra amount from your pockets. This is why it is recommended that you get a policy with a higher coverage limit.
