Why was my auto insurance claim denied?! When you get into an accident you expect your insurance policy to cover the damages. In some cases it is possible for the insurance company to deny your claim. The most common reasons are:
Your policy does not contain that coverage
Collision coverage is optional and if it was not purchased your collision claim may be denied. In Ontario, the Fault Determination Rules dictate how fault is assigned in a collision. If you are determined to be fault and do not carry collision coverage on your policy, your claim will be denied. If you are determined to be partially at fault, you may only be able to claim for a portion of the damages.
Your claim may also be denied if your policy carries an exclusion which caused the collision. For example if your roommate was specifically excluded from driving your vehicle but drove it anyways, causing the collision, they insurance company may deny the claim.
Your claim does not exceed your deductible
Your claim may be denied if the cost to repair your vehicle does not exceed your deductible. If your deductible is $1,000 but the damage done to your vehicle only costs $600 to repair, your claim will be denied as you are responsible for the amount up to your deductible before your insurance company will cover the rest.
Your policy is not valid
If your policy has been cancelled, your insurance company no longer has an obligation to cover the costs of your collision. You can be cancelled for a variety of reasons, most commonly, non-payment.
A policy condition was breached
If a statutory condition of the policy was breached, coverage on your policy can be denied and your policy voided. An example of this would be illegal activities such as street racing. Not only will there be no coverage for your vehicle but you may face fines and/or criminal charges.
Fraud was involved
Insurance fraud is a big deal. Any sort of vehicle collision is dangerous. It also costs the insurance companies a lot of money which leads to the average Canadian having a higher premium. Your insurance claim will be denied if your insurance company determines that there was fraud involved in the collision.
To make sure that your insurance policy is right for you. Don’t hesitate to contact one of Pacific Insurance Broker Inc.’s licensed representatives at (416) 494-1268.