It is frustrating to spend years paying your insurance premiums, only to have your claim denied when you need help. Most people have no idea where to start or who to go to when they their claim is denied because insurance companies protect their assets through rejections, underpaying, and delaying. These tactics often discourage people from further pursuing a request for compensation.
You can fight for your rights and not give up when your insurer refuses to pay your claim. Taking on a large corporation can feel overwhelming and exhausting if you do it alone, so having a strong legal team like Kirk Law Firm by your side is essential. Claim denials are common, so if you want to understand how often insurance claims are denied, keep reading.
Reasons Why Claims Are Declined
When an insurer rejects an individual’s claim for reimbursement, it is known as a denial. Some of the most common reasons include:
- Paperwork errors, even something as simple as using the wrong date of loss
- Policy exclusions that limit recompense for certain incidents or losses. One example is homeowner coverage; many policies do not cover certain natural disasters or damage caused by wear and tear
- Insufficient documentation of evidence, such as contractor’s estimates, photographs of damage, and/or receipts. Insurers may need proof the loss or damage falls within the scope of the policy, and incomplete or missing evidence is a common reason for rejection
- The loss did not occur during the policy period. Carriers often allege that the damage did not occur during the policy period.
- Suspicions of fraud or deliberate misrepresentation. This could include providing false information on the application, exaggerating the extent of damages, or submitting fraudulent documentation. Companies have entire teams dedicated to identifying fraudulent statements, and even minor inaccuracies can lead to denial.
- Not mitigating further damage. Immediately after property is harmed, the owners must attempt to prevent further damage before and during the insurer’s investigation of the damage.
Insurers often wrongfully deny or underpay legitimate claims. Policyholders should do their best to understand their contract and maintain meticulous records throughout the process.
How Common Are Insurance Claim Denials?
Property damage can happen at any time. When the unexpected occurs, people believe their insurance policy will protect their assets. However, providers can deny property damage claims for many reasons and may even deny coverage for their benefit. The exact frequency of filing rejections varies depending on the type of policy and the insurer in question. However, a significant number of individuals face challenges during the process. Studies and reports consistently show that denials are a common issue faced by policyholders across many types of insurance, including health, auto, home, life, and disability.
Many homeowners’ claims are denied due to contract exclusions, such as those for flood damage in areas where flood protection is not included. Disputes over the cause of damage, such as whether a roof collapsed due to a storm or lack of maintenance, also contribute to denial rates.
The frequency of refusals varies by the type of plan. Studies estimate that five to 15% of all insurance claims face denial at some stage of the process. It depends on the complexity of the filing, the clarity of the contract language, and how well the policyholder follows plan requirements, such as providing accurate information and paying premiums on time.
Contact Kirk Law Firm Today for Help Handling Your Insurance Request Denial
When individuals or businesses file claims, they expect their insurers to honor the policies and pay the compensation. Unfortunately, not all filings are approved. Denials can be frustrating, especially when policyholders believe they are entitled to coverage. When this happens, and an insurance company fails to fulfill its requirements by law or under the terms of the legally binding policy, it is in the best interests of the policyholder to obtain legal counsel. The legal professionals at Kirk Law Firm are ready to fight for your rights. Call today for a free case evaluation.