Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate drivers about...

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Reviewed by Laura Walker
Licensed Agent for 10 Years

UPDATED: Mar 18, 2019

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Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance-related. We update our site regularly, and all content is reviewed by auto insurance experts.

Auto insurance coverage is legally required by state laws and these laws also provide drivers peace of mind and the knowledge that they will be protected financially in the event of an accident, whether or not it was their fault.

Understanding coverages and their limits is important when selecting insurance policies, to make sure there are no misunderstandings or holes in coverage.

Use our FREE quote comparison tool to find auto insurance rates today!

Know What the Policy Covers

When signing up for new car insurance, the agent is supposed to supply the policyholder with a Declarations Page, which will detail all the benefits, costs and exclusions of the new policy. When the policy is renewed, it will come with a renewal copy of the Declarations Page, and it is important to review the Declarations for any changes.

It is never safe to assume what is covered under a policy with out reading it for verification, because by the time a policyholder finds out something is not covered, it may be too late.

The Declarations page will cover deductible amounts, coverage amounts, the premium amount and the policy period. The coverage amount can be defined as the maximum benefit that the policy will cover, and the deductible is how much money the policyholder has to pay before the insurer will pay out anything.

The premium is the amount the insurance will cost for the specific policy period.

What is a Valid Insurance Claim

There will be times when an insurance company denies a claim for valid reasons. This may be due to the fact that a policyholder did not have coverage for the claim, or a submitted claim might be fraudulent. Usually, a reputable insurance company will not have issues with denied claims, but there may be times when they reject a claim that is valid.

It is important to understand the reason behind a claim denial. There might be a simple answer, such as a misspelled name or policy number mistake, and since computers handle a good portion of the processing, a rejected claim could be due to a simple matching error.

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If the case is that a policyholder has not purchased a level of coverage that will cover the claim, there is no going back. An insurer will deny a claim if it is for something that is not currently covered in the claimant’s policy.

If a person submits a claim that is fraudulent, their insurance company has the right to deny it. If a person submits a claim for medical costs related to injuries, for example, but has not had any injury or treatment, the insurance company will deny the claim if they suspect fraud.

Insurance Fraud is a crime, and the insurance company will also terminate the person’s policy and alert the authorities about the fraud attempt.

What if A Claim is Valid?

Sometimes, even when a claim is valid, insurance companies will take a long time to pay it, although eventually they will. If the process seems to be taking too long, pursue the claim by following up with the insurance company to find out the status.

It helps to remain calm when following up with the insurer, and it makes sense to speak to a supervisor if the claim process seems stalled. Submitting a letter to the insurance company citing language from the policy and why the claim should be covered is helpful, and copies of any supporting documents should be included.

Records of the letter and all previous phone calls or other correspondence should be meticulously maintained. This is important in case too much time passes and the policyholder needs to hire an attorney to pursue payment from the insurer.

Claims are typically straightforward, and if a person has coverage for a claim, and the claim is legitimate, it should be paid. The best way to make sure there are no problems when it comes time for a claim is to only work with reputable insurance companies.

Research several companies and ask about their claims process, how long a claim takes to get paid, and the percentage of claims that get approved and paid out, before making a choice.

Use our FREE quote comparison tool to find auto insurance rates today!

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  1. How to File a Car Insurance Claim
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