You met with some unfortunate event in your life and lost a lot of money. However, you are not worried because you know you are covered by the insurance company. You have been paying premiums and you have never been late. There is no reason for the insurance company to deny you the coverage. However, when you claim for the coverage you find that you failed to read the fine prints where insurance company refuse your coverage and they would deny your claim. There are several reasons for the denial of the coverage claims. Here are some of them.
Below are the Top reasons when and how insurance company can your coverage and are hidden in the Insurance policy document
Losses incurred due to natural causes or ‘act of God’
There are many insurance policies that do not cover the losses incurred because of natural acts or in other words the act of God. For instance, you may have your house insured but it gets destroyed due to an earthquake. The insurance company can refuse your coverage claim citing it as an act of God.
To avoid this from happening, make sure that when you sign up for a policy you read the offer documents very carefully. If the area where you live is affected by frequent earthquakes you should buy the policy which covers damages caused by earthquake. You may have to pay higher premiums for that. Before buying the policy, make sure that you understand its terms and conditions completely.
Deliberate destruction caused by the insured
This is not a very uncommon scenario. There are many people who cause damage to their own property in order to make an insurance claim. For example, your insurance policy may cover accidental fire. Let’s say there was a fire in your factory and you go to the insurance company to file the claim. The insurance company pays out to you only after completing their investigation.
During the investigation, if they find that it was not an accident but a deliberate attempt to set the fire to claim for insurance, you will be denied coverage. Deliberate damage is also unlawful and the person getting involved in such a practice may get convicted for it.
When the claimed amount is higher than the contract amount
Your insurance claim may also get denied when the amount you have claimed is higher than the actual amount mentioned in the insurance contract. In this case if the insurance company denies paying out even the part of the claim as per the contract, you have the right to take them to the court of law. However, most of the insurance companies will pay you the claim according to the contract. Sometimes the claims are also denied when you fail to apply for it within the specified period of time.
What to do when the claim is denied or refused by Insurance company?
If you feel that the claim was denied incorrectly then there are many other things you can follow. The first thing you must do is read the entire offer document and figure out why the claim was denied. Even after reading you feel that the claim was denied incorrectly then you should confront the insurance company and ask for the explanation.