Insurance Inclusivity: Denial Prevention

Insurance companies can deny coverage for a variety of reasons, including having a history of accidents, a DUI on your record, or simply because they deem you to be a high-risk driver. While laws vary by state, generally, insurance companies cannot deny coverage based on factors such as age, credit score, gender, or ZIP code. If you are denied coverage, you have the right to appeal the decision and there are steps you can take to ensure you obtain the necessary insurance. This includes shopping around for quotes from different insurance companies, as well as looking into high-risk insurance options or state assistance programs.

Understand the reasons for denial, such as high-risk status, and take steps to reduce it

Understanding the reasons for insurance denial is crucial for taking proactive steps to reduce the chances of being denied coverage. One common reason for denial is being classified as a high-risk individual. This classification often stems from specific factors that insurers perceive as increasing the likelihood of future claims.

For instance, in the context of health insurance, pre-existing conditions, such as a health problem that existed before the Affordable Care Act mandate, can lead to claim denials. Insurance companies may reject claims related to a pre-existing condition or even deny coverage for a separate, new illness if the pre-existing condition was not initially disclosed.

Similarly, in car insurance, high-risk drivers are often those with multiple accidents, speeding tickets, or a DUI on their record. Other factors that contribute to a high-risk classification include having a poor driving record, a suspended or revoked license, driving a high-performance vehicle, or being a young or new driver. Living in an area with a high rate of vandalism and car theft can also increase the risk assessment.

To reduce the chances of denial due to high-risk status, it is advisable to improve the factors that led to this classification. For health insurance, this could mean disclosing pre-existing conditions and providing detailed information about medical necessity. For car insurance, taking steps to improve driving abilities and reduce the number of accidents and traffic violations can be beneficial. Enrolling in a defensive driving course can be a proactive measure to demonstrate improved driving skills.

Additionally, maintaining continuous insurance coverage is essential. Gaps in coverage, whether in health or car insurance, can lead to denial of future coverage. Therefore, it is crucial to avoid lapses in coverage and promptly renew policies to maintain protection.

Appeal the decision by gathering evidence, drafting an appeal letter, and potentially hiring an attorney

If your insurance company denies your claim, you have the right to appeal the decision. Here are the steps you can take to appeal:

Gather Evidence

First, review the documentation provided by the insurance company explaining the reason for the denial. Then, gather any evidence that supports your case, such as police reports, eyewitness information, photographs, medical reports, and other relevant documents. Make copies of everything and keep the originals for your records.

Draft an Appeal Letter

Write a letter to the insurance company explaining why you disagree with their decision. Be sure to reference the evidence you have gathered and provide as much detail as possible. You can use the example appeal letters provided by the Washington State Office of the Insurance Commissioner as a guide.

Consider Hiring an Attorney

If you feel uncomfortable handling the appeal yourself or want expert advice, consider hiring an attorney. An attorney can review your case and supporting documents and draft a demand letter to the insurance company. While hiring an attorney may incur upfront costs, it could be worthwhile if it leads to the claim denial being overturned.

It is important to note that insurance companies are required to inform you of the reason for denying your claim and the process for disputing their decision. You also have the right to an internal appeal, where you can request the insurance company to conduct a full and fair review of its decision. If the case is urgent, the insurance company must expedite this process. If the internal appeal is unsuccessful, you can request an external review by an independent third party.

Shop around for quotes from other insurance companies, including those specialising in high-risk drivers

If you're denied car insurance, you can shop around and apply for quotes from other insurance companies, including those that specialise in high-risk drivers.

Insurance companies deem high-risk drivers to be more likely to be involved in an accident. There are many reasons why someone might be considered a high-risk driver. These include:

• A conviction for offences, such as driving under the influence of drugs or alcohol, or reckless driving.
• Multiple speeding tickets.
• More than one recent at-fault collision.
• A lapse in coverage.
• Being a new or young driver.
• Living in a high-crime area where theft and vandalism occur often.
• Driving a high-performance car that runs a higher risk of being stolen.
• Having a poor credit score.

If you fall into one or more of these categories, you may be denied car insurance. However, you can still shop around for quotes from other insurance companies. Some companies specialise in offering coverage to high-risk drivers, such as Bristol West, State Farm, and The General. Small insurers may be more likely to offer coverage than large agencies.

When choosing an insurance provider for a high-risk policy, consider the quality of coverage, customer service and reputation, your own driving history, and your budget. High-risk insurance typically comes with increased premiums, so getting quotes from multiple companies is important to ensure you get the best rate.

Improve your credit score, as this can be a factor in denial

Improving your credit score can be a crucial factor in ensuring that insurance companies do not deny you coverage. A poor credit score can lead to denial of car insurance, as insurers may perceive you as a high-risk driver.

• Make timely payments: Ensure that you pay all your bills, loans, and credit cards on time. Payment history is a significant factor in determining your credit score, and even one late payment can negatively impact your score.
• Manage credit utilisation: Keep your credit utilisation rate below 30%. This rate is calculated by dividing your outstanding balance on each revolving account by its credit limit. For example, if you have a $3000 credit limit, try to keep the balance on your credit cards below $900 in total.
• Limit new credit applications: Avoid applying for multiple credit cards simultaneously. Each application results in a hard inquiry, which can lower your credit score, especially if you have a short credit history.
• Monitor your credit report: Regularly review your credit report for any inaccuracies or discrepancies. You have the right to dispute incorrect information and ensure your report accurately reflects your creditworthiness.
• Build a positive credit history: Focus on maintaining a consistent record of on-time payments and responsible credit utilisation. Over time, this will contribute to improving your credit score.
• Use secured credit options: Consider getting a secured credit card, which requires a security deposit that serves as your credit limit. Making timely payments on this card can help establish or rebuild your credit history and improve your score.

By following these steps and maintaining a good credit score, you can reduce the likelihood of insurance denial and improve your overall financial standing.

Contact your state insurance commissioner's office if you suspect unlawful denial

If you suspect that your insurance claim has been unlawfully denied, you can contact your state insurance commissioner's office. For example, in Washington state, you can call the Office of the Insurance Commissioner on 800-562-6900, Monday to Friday, 8 a.m. to 5 p.m.

Before contacting your state insurance commissioner's office, it is a good idea to understand the reasons for the rejection and gather any relevant evidence. This could include police reports, eyewitness statements, photographs, and medical reports. It is also important to carefully review the denial letter and identify the specific reasons for the denial.

If you believe that there has been an error in the insurance company's claim denial, you can appeal the decision. Most insurance companies have a process in place for contesting a denied claim. This usually involves drafting an appeal letter that explains why you disagree with the decision and providing supporting evidence. You may also want to consider hiring an attorney to help you with the appeals process.

If your health insurance company has denied coverage for a particular treatment or disputed a bill, you can first try to resolve the issue by calling your medical provider's billing office and asking them to clear things up with the insurer. If this does not work, you can then start the appeals process. Your health insurance company must allow continued care during the appeal, and they cannot change, reduce, or stop benefits for an ongoing course of treatment without providing advance notice and an opportunity for review.

If you lose your appeal, you may be responsible for covering the medical costs for your continued treatment. However, you may be able to delay paying the bill until you know the outcome of your appeal or negotiate a lower price.

Frequently asked questions