As a content creator, I always try to provide relevant and useful information for all of you. This time, I want to discuss a topic that is quite important and often frustrating: rejected insurance claims. Honestly, who wouldn’t be annoyed if they’ve paid premiums for years, eh, when they needed it, it was rejected?
I personally have experienced an unpleasant incident related to this insurance claim. At that time, I was preparing funds for the development of my website. Suddenly, my beloved laptop was badly damaged because of a water spill. Panicking, I immediately filed an insurance claim that I thought could help ease the burden. But, what happened? My claim was rejected!
This experience taught me a lot about the ins and outs of insurance and why claims can be rejected. I became more careful and tried to understand all the applicable provisions. Well, from my personal experience and research, I want to share some common mistakes that often occur and cause insurance claims to be rejected. Let’s take a look!
1. Inactive Insurance Policy (Lapse)
This is the most classic and common mistake. Insurance policies can be inactive or lapse if you are late in paying your premium. Every insurance company usually provides a grace period for premium payments, usually around 30-45 days. If you do not pay your premium within the grace period, the policy will automatically become inactive and all claim submissions will be rejected.
Lesson learned: Make sure you always pay your premiums on time. If necessary, activate the auto-debit feature so you don’t forget. Don’t let late payments result in the loss of the protection you’ve fought for.
2. Not being honest in disclosing medical history (pre-existing conditions)
The next mistake is being dishonest or hiding important information about your medical history when buying an insurance policy. A health condition that already exists before you buy insurance is called a pre-existing condition. If you have a history of a certain disease and do not disclose it when applying, the insurance company has the right to reject the claim if the disease recurs or causes problems later.
Lesson learned: Be honest when filling out the insurance application form. Do not hide any information about your medical history. It is better to be open from the start than to regret it later.
3. Claims do not comply with policy provisions
Each insurance policy has different provisions and coverage. There are policies that only cover certain diseases, some are only valid in certain areas, and some have limits on the coverage value. If the claim you submit does not comply with the provisions stated in the policy, it will definitely be rejected.
For example, you have Total Loss Only (TLO) car insurance that only provides protection if the car is damaged by at least 75%. If your car is only damaged by 60%, your claim will be rejected. Or, you have health insurance that is only valid in America, but you seek treatment abroad. Your claim will also be rejected.
Lesson learned: Read and understand carefully all the provisions stated in your insurance policy. Don’t be lazy to read the terms and conditions. If there is anything unclear, don’t hesitate to ask your insurance agent.
4. Incomplete Claim Documents
This is also often the cause of claims being rejected. When filing a claim, you are required to complete all documents required by the insurance company. Documents that are usually required include claim forms, doctor’s certificates, proof of payment, and other supporting documents. If there are any documents missing or invalid, your claim process can be delayed or even rejected.
Lesson learned: Make sure you prepare all the required documents completely and correctly. Don’t miss anything. If necessary, create a checklist to be more organized.
5. Claim Submission Exceeding the Time Limit
Each insurance company has a specific deadline for filing a claim. If you file a claim after the deadline, your claim may be rejected. The claim deadline is usually stated in the insurance policy.
Lesson learned: File a claim immediately after an incident that causes a loss. Don’t delay. Pay attention to the claim deadline so you don’t miss it.
6. Committing Criminal Acts or Breaking the Law
Insurance claims can also be rejected if the loss you experience is caused by a criminal act or violation of the law that you have committed. For example, you are driving drunk and cause an accident. Or, you die because of committing a crime. In cases like this, the insurance company has the right to reject your claim.
Lesson learned: Avoid any illegal actions. In addition to harming yourself, such actions can also cancel your insurance coverage.
7. Waiting Period Has Not Passed
Some insurance products, especially health and critical illness insurance, have a waiting period. The waiting period is a period of time after the policy is active, during which you cannot file a claim for a certain type of illness or condition. If you file a claim before the waiting period ends, your claim will be rejected.
For example, you have just purchased critical illness insurance with a 12-month waiting period. If you are diagnosed with a critical illness within 12 months of the policy being active, your claim will be rejected.
Lesson learned: Pay attention to the waiting period that applies to your insurance policy. Do not rush to file a claim before the waiting period ends.
8. Invalid or Outdated Information
Make sure all the information you provide to the insurance company is valid and up-to-date. Invalid or outdated information can be a reason for a claim to be denied. For example, you provide an invalid home address or an inactive bank account number.
Lesson learned: Always update your personal information to the insurance company if there are any changes.
9. Exclusions in Insurance Policy
Every insurance policy has a list of exclusions, which are conditions or events that are not covered by the insurance. These exclusions are usually clearly stated in the policy. If the claim you submit is included in the exclusion list, your claim will be rejected.
For example, your insurance policy excludes the risk of natural disasters such as earthquakes or floods. If your house is damaged by an earthquake, your claim will be rejected.
Lesson learned: Understand the list of exclusions stated in your insurance policy. Do not assume that all risks will be covered.
Tips to Avoid Rejecting Insurance Claims
After knowing the various mistakes that often cause insurance claims to be rejected, here are some tips you can do so that your claim is approved:
- Choose the Right Insurance: Adjust the type of insurance to your needs and abilities. Don’t just be tempted by cheap premiums, but also pay attention to the scope of protection and applicable provisions.
- Compare Several Insurance Products: Do your research and compare several insurance products from different companies. Pay attention to the benefits, premiums, terms, and reputation of the company.
- Consult with a Trusted Insurance Agent: Don’t hesitate to consult with a trusted insurance agent to get a detailed explanation and help you choose the most suitable product.
- Read and Understand the Insurance Policy Carefully: This is the main key to ensure your claim is not rejected. Read all the terms, exclusions, and conditions stated in the policy. If there is anything unclear, ask your insurance agent.
- Pay Premiums on Time: Don’t let your policy lapse due to late premium payments. Activate the auto-debit feature to make it easier.
- Honest and Open: Provide honest and open information when filling out the insurance application form. Do not hide any information, especially regarding your health history.
- Complete Claim Documents Correctly: Prepare all required documents completely and correctly when submitting a claim.
- File Claims on Time: Do not delay filing a claim. Pay attention to the applicable claim filing deadlines.
- Store Insurance Policies Properly: Store your insurance policies in a safe and easily accessible place.
Hopefully this information is useful, my friends! Don’t let my bitter experience happen to you. By understanding the ins and outs of insurance and avoiding the mistakes above, you can maximize the benefits of insurance and get optimal protection.