When you need it most, your car insurance policy is designed to protect you and your vehicle. Unfortunately, there are circumstances as to why the insurer may deny claims for damage to your vehicle after a collision. Today, we at InsureWise, LLC would like to share the common reasons as to why you may be denied your claim.
What Circumstances Would Make an Insurer Refuse to Provide Insurance Cover?
1) Breach in Policy. By participating in a race or in illegal activities, such as illicit trade or transportation, you have breached a condition of your policy. Your insurance company may deny your claim and cancel your policy in addition to you looking at potential hefty fines or even jail time. There are certain situations when your insurer may deny claims for damage to your vehicle after a collision while your car insurance policy is designed to protect you and your vehicle when you need it most.
2) Fraudulent Insurance Claims. Making a fraudulent claim is definitely something that will get you denied. For everyone involved, not only are staged accidents and car insurance fraud dangerous, but they are also expensive for insurance companies. This increase in false claim payouts can lead to higher premiums for everyone who has car insurance, over time.
3) Lack of Insurance Coverage. You’ve made a claim that isn’t covered by your policy. For example, the coverage you need if you’d like to be reimbursed for repairs following a collision if you decided not to purchase collision coverage. Other examples are that while your vehicle was rented or leased by you to another person, the collision occurred or at the time of the accident, an excluded driver, someone you have intentionally removed from your car insurance policy, was driving your vehicle. To make sure you have the coverage you need, keep your broker informed about any changes in your vehicle use.
4) Repairs are Less than the Deductible. You will be responsible for paying the bill, if the damage will only cost $300 to repair but your insurance coverage’s definition of the deductible is $500. Make sure you’re comfortable with the deductibles outlined in your policy and get the lowdown on deductibles.
5) Using Personal Vehicle for Business Use. Your claim won’t be covered if you have a personal car insurance policy but you’re using your vehicle for commercial purposes, for example, if using your car to make deliveries or using your vehicle as a tow truck, and are in a collision. Your insurer could also cancel your policy for failure to disclose a material change in addition to a denied claim. Your claim likely won’t be covered by a personal auto insurance policy if you’re using your personal vehicle for commercial purposes like making deliveries and are involved in an accident.
6) Personal Vehicle Used to Transport Paying Passengers. If you’re using your vehicle as a taxi, bus, or sightseeing van to transport paying passengers, your personal auto insurance policy won’t cover you. This typically doesn’t apply to situations like sharing the cost of an occasional trip with others traveling with you or being reimbursed for driving expenses like gas as a volunteer driver, however.
7) Insurance Policy is Expired or Cancelled. You won’t be protected in a collision if in the event your car insurance policy was cancelled, for non-payment for example, and you continue to drive without purchasing new coverage.
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To make sure you have the right coverage before the unexpected happens, always follow the rules of the road, drive safely, and reach out to your licensed broker. It is worth contacting your broker just to be safe if you make any changes to how you use your vehicle and aren’t sure whether something needs to be reported. Call the experts of InsureWise, LLC or fill this easy online quote form and let us help you with auto insurance coverage.