What is Coverage Denial?
When an insurance company refuses to pay a claim, asserting that the loss is not covered under the policy terms or that the policy was not in effect.
Understanding Coverage Denial
Denials can be based on policy exclusions, lapsed coverage, late notice, or disputes about whether the incident is covered. Policyholders can appeal denials, file complaints with state insurance departments, or sue for bad faith if the denial was unreasonable.
Examples
- 1Claim denied due to policy exclusion for intentional acts
- 2Denial based on failure to report accident promptly
- 3Disputing denial through internal appeal process
Related Terms
Bad Faith Insurance
When an insurance company unreasonably denies, delays, or underpays a valid claim, or fails to properly investigate or defend its insured.
Appeal
A legal proceeding in which a higher court reviews the decision of a lower court to determine if legal errors were made that affected the outcome.
Uninsured Motorist Coverage
Insurance coverage that protects you if you're injured by a driver who has no liability insurance or insufficient coverage to pay for your damages.
No-Fault Insurance
An auto insurance system where each driver's own insurance pays for their medical expenses and lost wages regardless of who caused the accident.
Total Loss
When a vehicle is damaged to the extent that the cost of repairs exceeds the vehicle's actual cash value, or when the vehicle cannot be safely repaired.
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