Your car insurance policy is designed to help cover the cost of repairing or replacing your car after an accident or other accident. This is one of the most important insurances you will buy because it ensures that you get the financial protection you need in the event of an accident. After an accident, you may think that the difficult part is over. After all, your insurance company will pay you, right?
Unfortunately, this is not always the case.
Auto insurance companies use a complex set of guidelines to determine whether and when to provide a settlement. The insurance company considers factors including damage to the insured’s vehicle, liability to others, and the type of insurance you choose.
Common reasons for denial of claim
Some common reasons for denial of claims include:
• Do not admit mistakes
• Hide important information
• Lie to the insurance company
• Do not report incidents
• Lack of insurance
• Caught while driving without car insurance
• Driving a stolen car
• Driving without a valid driver’s license
But this is not all. Let us delve into some other reasons why your claim was denied.
You may not notice minor damage that is not your own fault. But adjusters may not-this is the reason for denial.
You may also think that you have covered damage that is not your fault. For example, someone may park their car too close to your garage, and when the garage door opens, your car may hit their car. However, if you damage the vehicle in a collision, your insurance company may deny your claim.
You may have accidentally caused an accident, but your insurance company may still blame the accident on you. For example, if you are driving at a high speed and someone is rear-ending, you will naturally think that you are at fault. However, if another driver is at fault or the weather causes the accident, you may be at fault and still receive compensation.
What can you do in an accident?
If you are involved in an accident, it is in your best interest to report to your insurance company as soon as possible. The insurance company will consider the fault when determining the amount of the auto insurance claim. For example, if you encounter a hit-and-run situation, it is the fault of another driver. Admitting mistakes to the insurance company helps speed up the claims process, because insurance companies want to resolve claims quickly and fairly.
Damage your vehicle
The insurance company may reject or deny your claim for invisible damage. For example, if your car engine is damaged due to high temperatures, the regulator may consider it unnecessary to check it further. If he or she does this, the damage can be repaired, but if the result is more serious, your claim may be rejected.
But what happens when your car is scrapped?
Insurance companies usually cut checks to cover an entire vehicle, but this process is much more complicated than this. In fact, if your car is scrapped, your insurance company may also reject your claim.
What will you get in terrible situations?
If your car cannot be repaired, the insurance company may provide you with the total value of the car minus the cost of repairs. However, if your car is worth between US$3,000 and US$6,000, and the repair cost is US$5,000, the insurance company may only give you US$1,000. This amount is usually lower than the value of your car, but it is better than nothing.