Imagine you’ve been in a car accident and submitted your claim to your insurance company, only to find out that it’s been denied. This is the last thing you want to hear after all the emotional and financial distress you’ve been under recently. To ensure that you aren’t put in this situation during the process, it is important to know why a claim could get denied. Here are 4 reasons why an auto insurance claim could be denied.
1. Misrepresentation
It is incredibly important to disclose all crucial information to your insurance provider, and to always keep them up to date on any changes. This is because insurers have the right to deny a claim if they have reason to believe the information they have is not truthful. An incorrect address could lead to issues with your coverage. An honest forgetting to notify your insurer of an address change would not be grounds for denial of claim. However, things like using a friend’s address, or rating a vehicle at “cottage” when it is actually garaged in the city to obtain a better price can result in your claim being denied.
When purchasing your auto insurance policy, make sure that everything documented on your policy is 100 per cent accurate. This includes the names of all drivers who operator or use your vehicle, your annual kilometres, any previous damages, and any customization or modifications you have had done. If your insurance finds out that you have misrepresented your vehicle in your policy, your claim may be denied.
2. You violated your policy conditions
Each Ontario auto insurance policies has a specific set of rules that must be followed that is called Statutory Conditions. If you breach one of these rules, and your insurance provider finds out, your claims may be denied. A common violation of a personal auto insurance policy is using the insured vehicle for business or commercial purposes. If you’ve signed up for a personal-use policy, you must only use your car for personal reasons in order to remain covered. The reasoning behind this rule is that vehicles used for commercial purposes are driven on a more frequent basis, and cover a lot more kilometres than those used for personal reasons. Therefore, they have a much higher probability of being involved in an accident, and have a higher risk score.
If you do intend to drive your vehicle for business reasons, please speak to your broker about commercial automobile insurance. It is also important to speak with your broker if you plan to drive your vehicle for a rideshare service, such as Uber or Lyft. This is necessary to ensure that your specific policy will allow for coverage in this circumstance.
3. Missing documentation
In order to process a claim, insurance companies need to verify all the important and necessary information surrounding your accident. Sometimes, certain documentation is required to complete this verification. These documents can include things such as invoices or bills, licences, evidence of your accident, or anything else of relevance. If you fail to submit all of your documents, you claim could end up being denied. However, this can be easily resolved. You are always able to re-submit your claim with the proper documentation that is needed if you do find yourself in this situation provided the claim is submitted within the timeframe required by statutory conditions.
4. Your claim involves illegal activity
This one may seem quite obvious, but many people still try to submit claims that are somehow connected to criminal activity. If you vehicle is used for Illegal activities with your knowledge this is grounds for claim to be denial. Examples:
- If you have received any convictions, criminal or not, within the past three years, this is something that you insurance broker must be aware of. Any conviction stays on your driving record for 3 years from the conviction date, therefore only convictions in the past 3 years are required to be disclosed.
- If you are convicted of using your vehicle while under the influence of alcohol or drugs, your claim may be denied. Driving while intoxicated or high is extremely illegal, as it puts every single person on the road at risk.
- If you are involved in any sort of accident, and are caught driving with a suspended license, your insurance company can deny your claim. In this circumstance, they can even cancel your policy altogether.
Do you have questions about a recent claim of yours? Or do you simply have more questions about auto insurance? Get in touch with one of our licensed insurance professionals 7 days a week.
