Three Main Reasons Why an Auto Insurance Claim is Denied or Underpaid

From Insurance for Dummies by Jack Hungelmann

Insurance is a 20-page promise to make you whole financially if certain events happen that threaten your financial well-being. It’s not a promise to make you whole for anything that happens. If a circle represents every conceivable claim, a box within the circle represents claims covered by an insurance policy.

Many people assume that every possible claim is within the box. Nothing could be further from the truth! However, the box is expandable. If you have risks in your life that lie outside the box, use coverages and endorsements to expand the size of your box until it covers the areas you need it to.

The majority of claim disputes or unhappiness, in my years of experience, arise from claims or damage to your automobiles, your home, and your personal property. This chapter focuses on your automobile claims. The next chapter addresses home and personal property claims. An automobile claim is underpaid or denied by an insurance company for three main reasons:

• The type of claim being submitted isn’t covered by the particular policy — although it would have been covered by a more comprehensive policy (normally the case).
• The type of claim being submitted is never covered by any policy (rarely the case).
• The claim is mishandled by the insurance company (occurs enough that you need to be aware of the problem).