When an Insurance Claim is Denied

Jimmy Cooper, Marketing Coordinator

Introduction

One of the most disheartening situations is if your insurance claim is denied. Claims being denied can happen for a variety of reasons. But it happens more often than we think. The American Hospital Association found that, on average, 18% of medical claims were denied in 2020, and some plans had a staggering 80% denial record during the reporting period. Fret not; we will review some helpful insights to help prevent future claims from being denied.

Common Denials of Medical Claims

The most common claim denials for medical insurance are missing or incorrect information and coding errors. Some other denial reasons include:

• Overlapping or Duplicate Claims – Overlapping claims are when two claims have contradictory dates or a different provider files the claim. Submitting duplicate claims on the same incident will also cause a claim to be denied.  
• Missing your Submission Window – When making a claim, you have an allotted time frame for submitting if you fail to submit before your due date, your claim will be denied, and you will be responsible for your medical bills.
• Out of Network or Procedures not covered by your plan – Some providers have an exclusive provider program that only covers care provided by hospitals and clinics in their network. Not all plans have the same coverage, and you can be easily denied if your procedure is not listed.

Common Denials of Auto Claims

With your auto policy, the most common claim denial reason is there is a dispute as to fault or liability. If the insurance companies involved do not agree on the responsibility of what party is at fault, there’s a chance the claim won’t be paid. Curtis Legal Group says the following most common reasons are:

• Violated Terms and Conditions – If it is discovered that you were breaking the law by texting while driving or operating a vehicle under the influence of drugs or alcohol, it is likely your claim will be denied outright.  
• Lack of Coverage – If your policy does not cover the value of your accident and you cannot pay the additional coverage, the claim has the potential of being denied.
• Missing your Submission Window – As with medical claims, auto claims have a time limit when they have to notify their insurer. The time to make a claim varies between providers and state and local laws.

 Common Denials of Home Claims

According to Urban NW Homes, the most common reason your home insurance claim may be denied is due to a lack of coverage. Confirming that you have adequate coverage is essential when choosing any insurance policy. You want your policy to cover all expenses and not leave you under financial strain.  Other reasons the insured are denied are:

• Missing your Submission Window – This is a massive reason for the denials for all types of insurance we discussed. When filing claims, do it as soon as possible to avoid being denied.
• Paying late or missing your payment – Without payment, your policy can lapse, and if this happens when your home is damaged, your claim can be denied.
• Lying about the scope of damage/ Insufficient Documentation of the Damage – Not telling the truth about the nature and severity of damage will do you no good. The insurance provider will send an adjuster to inspect the damage. Your claim could be denied if that report indicates that you were not honest.

How to Prevent Rejected Claims?

Anyone with an insurance policy can benefit from knowing the common causes of claim rejections. Studying and researching policies and their coverages is an excellent place to start. Ensure all information is submitted within the allotted time and is accurate and that you have policies with enough coverage to match or exceed your needs.

Summary

Regardless of the type of insurance you are making a claim for, there are likenesses to being denied across the board. Remember to stay diligent, submit accurate claims on time, and if you have questions, reach out to your provider and ask them for help. For example, for minor mistakes or appealing a claim, you should be able to call your policy provider’s customer service number. Unfortunately, not all claim denials have easy resolutions, and in some disputed cases, a rejection might have to be resolved through legal action. Our specialists at Price & Ramey are ready to answer any policy-related questions you have about claims and can ensure you have enough coverage. Get started by getting a quick quote here.