What To Do If You Are Denied Car Coverage

Car insurance is a necessary evil for anyone who wishes to drive a car for a daily commute or a simple leisure road trip. It is a necessary evil because, in the event of an accident, it serves as a safety net and financial protection as it helps to pay for damage, repairs, medical bills, and other losses.

Car insurance coverage is essential for drivers because if caught driving without it, they can be penalized with heavy fines and jail time.

Instances where drivers are denied coverage can be disheartening. To avoid falling into this category, we will discuss the possible reasons car insurance companies may deny drivers coverage.

Reasons You May Be Denied Car Insurances

A car insurance company can deny coverage to drivers for almost any reason, but they will mostly deny persons who they perceive are more likely to file a claim.

Car insurance companies do not always tell you why your application was denied. You may need to contact an agent or the company directly to find out why you were denied coverage.

To be on the safe side, it is advisable to be on your best driving behavior when you want to apply for car insurance.

People who are more likely to file a claim are risky drivers who are prone to causing accidents, it could also be a combination of other factors. Below are some of the factors:

Policy Lapse

Policy lapse refers to when drivers do not renew their payments on schedule; when this happens, car insurance companies will cancel their coverage.

They may refuse to provide coverage when there is an accident or payments are not made on schedule.

Insurance policies are given out for a certain amount and at a scheduled time, for example, six months or one year. When the time elapses, and the insurance expires, failure to pay up may lead to cancellation and subsequent denial.

Non-Disclosure of Personal Information

There is several relevant information that policyholders must submit to insurance companies that could have an impact on the insurer’s decision to offer coverage to them.

If such information is not disclosed, the insurer could refuse coverage to be on the safer side when there is a situation.

Inability to Meet Policy Requirements

There are requirements policyholders must meet to be declared eligible for certain coverages for instance, car insurance policies may demand that car owners keep their cars in good condition while practising safety regulations.

When there is an accident, the insurance company finds out the car was not in good condition and didn’t practice safety regulations. So, they may refuse to pay for any damages and deny them coverage.

Fraudulent Claims

Insurance companies are wary of fraudulent claims and are very mindful of policyholders when they make claims by investigating the claim.

Fraudulent claims include staged accidents, exaggerated damages, and making claims for pre-existing damages.

Once insurance companies have reasons to believe a claim is false, they will refuse coverage and might even proceed to sue.

Highly Risky

Insurance companies may deny you coverage if you seem to be highly risky by having several driving violations, speeding tickets, and have caused many accidents

If you drive a fast, high-performance vehicle that is prone to accidents or live in an area with a high number of car thefts and vandalism incidents you will be viewed as highly risky and may be denied coverage.

How to Avoid Being Denied Car Insurance Coverage

Below are a few tips on how to avoid being denied car insurance coverage:

Maintain safe and good driving habits
Enroll in defensive driving courses
Improve your credit scores
Consider purchasing a less risky vehicle

What to do When You are Denied Car Insurance Coverage

There are several steps you can take to appeal to the insurance companies when you have been denied car insurance coverage, below are some of them:

If you feel it is an error on the company’s part, you can analyze your policy to spot the error.
You can request an explanation from your insurance provider
If your claim was rejected as a result of lack of information, you can submit the documents needed
You can consult a lawyer
You can fill out a complaint form for the National Association of Insurance Commissioners
If you were denied because you are highly risky, you can find companies referred to as non-standard insurers who will insure you without complaints.
You can add to another person’s policy, such as a family member or roommate.

FAQs

Will I Be Denied Coverage if I Have an Old Car?

Yes, if you have an ancient car, car insurance companies may refuse to provide you with coverage.

You can either change your car or look out for a particular insurance company that does not mind insuring an old car.

Other companies place age restrictions on automobiles, so you may be denied coverage if your car is too old.

Will I Be Denied Coverage if I Don’t Have a Valid Driver’s License?

Yes, if you do not have a valid driver’s license you will be denied coverage by insurance companies. Driving without a valid license is illegal and could escalate into severe penalties.

Will I Be Denied Coverage if I Have a Bad Driving History?

You will be denied car insurance coverage if you have a poor driving history. A poor driving history includes a history of at-fault accidents, law violations such as speeding tickets, and other moving offences.

The above violations will make you a hazardous driver prone to accidents much more than having a poor driving history. As a result, cat insurance providers may refuse to provide you with insurance coverage.

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