There are many reasons why car insurance companies deny insurance claims. In most instances, fortunately, few of us will actually have to make a significant insurance claim in our lifetime. We pay our car insurance premiums, and for the grace of God, go on our merry way.
When a claim is made to an insurance company, there are all types of legitimate reasons it can be denied. For example, some claims may be outside the scope of the policy, issues of causation can be too remote, and in most travel medical cases insurers deny payments because of pre-existing illnesses, injuries, or diseases. However, there are some insurance companies who just love to find obscure reasons not to pay.
Reasons Why Car Insurance Companies May Deny Your Claim
1. Going to the US for the winter and not telling your insurer you will be away
Most Canadian car insurance policies will allow you to stay out of your respective province for six months. Some policies might even have shorter terms. If you are gone longer than what is allowed on your policy, you can very well find you have no coverage. Please check your policy prior to leaving for any lengthy trip.
2. Moving or changing addresses
If you move or change addresses and fail to notify your insurance company, they can deny your claim. Car insurance companies base premiums on where you live. In heavily populated areas you are more likely to get into an accident – hence your premium is larger. This is also true if you move from province to province or state to state. In most instances, insurers are only allowed to offer insurance in the jurisdiction they are licenced to do so. If you move out of state, expect to have to change insurers. If you are moving from a rural area to a city, expect your rates to go up.
3. Buying a new vehicle
If you buy a new or used vehicle and did not advise your insurer, they can deny your claim. This is especially true if you are at fault for an accident. Insurers provide insurance on the basis of the value of your car and your driving record. Most car sellers ask for proof of insurance at the time of purchase but in some states, the obligation of complying with mandatory coverage falls upon the owner of the car. Newer cars usually mean higher premiums.
4. If your driver’s licence is suspended
It is obvious you should not be driving a car if your licence has been suspended. There are however some instances in which a driver might not know their license has been suspended: for example, outstanding parking fines. No licence equals no insurance.
5. Lapsed licences
This is a ridiculous reason for denial, but car insurance is only for those who are licenced. Regardless of the fact you are paying insurance premiums, should your licence lapse, an insurer can deny coverage. From our perspective, common sense needs to be applied. A lapsed licence doesn’t mean you are not qualified to drive. With the Covid pandemic, some jurisdictions even suspended the necessity of car and drivers licence renewal.
6. Failing to report an accident
Time after time, people involved in fender benders are afraid to report an accident to their insurer. They are concerned their premiums will go up so they hope the problem will go away. If so, great. But in situations where there are lengthy statutes of limitations for bringing a personal injury claim, (Florida is 4 years from the date of the accident), an insurer can take the position its defence of the claim was prejudiced by your failure to report.
7. Non-payment of premiums
If you miss even one payment, an insurer can deny claims made on the policy and in addition terminate the insurance policy. Believe it or not, this is actually a common problem for those insured who deal with automatic withdrawals. If the insurer is not paid, expect mayhem should you need to make a claim.
8. Someone other than you drives your car and is involved in an accident
Another very common problem revolves around what you told or did not tell your insurance company about who is driving your car. For example, insurers routinely ask if there are other licensed people living in your home, or whether someone other than you will be using your car. If the insurer is not told the correct information, and someone other than you is involved in a car accident with your car, expect the claim to be denied. Hiding information so your premium is less, can have calamitous results.
Stay Out Of Trouble And Keep Your Car Insurance In Good Standing
It is an insurers business to assess risk and make money. Remember in major catastrophic claims, the first thing an insurer does is check to see if the terms or conditions of the policy has been breached. Even the most minuscule issue can have somewhat tantamount results.
You can prevent these headaches by taking the high road. Notify your insurer when you move. Periodically check your insurance renewal document to make sure it is correct. If involved in an accident, tell your insurer. And lastly, tell them everything about who (other than you) will be driving or have access to your car.
If Car Insurance Companies Have Denied You, Snowbird Accidents Can Help.
If you have been seriously injured and you’re wondering what your available options are, give us a call today. The Snowbird Helpline can help go over the options available to you, including Statutory Accident Benefits (SABs), accessing your insurance policies, and bringing a lawsuit (tort claim) against the at-fault driver.
Your options for bringing a lawsuit (tort claim) against the at-fault driver will differ based on the state or province where you were injured.
Any personal injury law firm, personal injury lawyer, or personal injury attorney we recommend has shown they have extensive knowledge and expertise you can trust when faced with the challenge of a cross-border accident.
