What to do when your insurance claim has been denied?
You file a claim for cover under your policy with your insurance company. Perhaps your loss was from a motor vehicle accident, business interruption, an issue with your construction site, home building or its contents, or a health concern.
You receive a letter denying indemnity or a “declinature letter”. In essence, your insurer denies your insurance claim and your policy does not respond to your claim. How should you respond? Don’t accept it, write an insurance appeal letter.
Rarely does a policyholder or Insured contest the denial of insurance cover.
What to do if your insurance claim is denied — Ten Tips
- Know that a denial of your insurance claim is not the end of the road. You have certain rights that allow you to pursue further review.
- If your denial was oral — over the phone or in person — you have the right to obtain the company’s decision in writing. This letter may offer information that could assist your challenge of the denial.
- Read your contract of insurance, policy, certificate of insurance, endorsements and any other related material. The written denial of insurance from the insurance company should reference specific sections within your contract or policy of insurance and the reasons for the denial.
- Do your research and review your facts. See if the insurance company’s understanding of the facts matches yours. Apply your facts to the language of your policy.
- Consider having your broker assist you. He or she will understand the language of the insurance world better than you. Moreover, your broker has a vested interest in keeping you as a client. Further, if your broker does a lot of business with the particular insurance company, they have a stake in keeping the broker engaged.
- You can write a letter to the insurance company’s Dispute Resolution Department. Every insurance company should have one, and it is obligated to respond to such inquiries.
- Complain to the General Insurance Division of the Financial Ombudsman Service, who look after many type of disputes. This can be done in writing or over the phone. They have a procedure whereby they can review and resolve disputes.
- Retain a lawyer for assistance. It is important to know that a solicitor can review the insurance documents, review the insurer’s decision, and determine whether you should have been covered under the policy. If the insurer’s decision was made incorrectly, your solicitor can contact your insurance company and attempt to remedy the situation on your behalf. This could save you a significant amount of stress and money and also increase your chances of being indemnified by your insurer.
- If all else fails, your solicitors may recommend that you take legal action against your insurance company. It is not unusual for policyholders to commence proceedings against their insurer. In some instances, successful legal action can result in your claim being covered (indemnified) and the legal costs being reimbursed by your insurer.
- Above all, know your rights! Become an educated consumer. Your own knowledge is often your best ally.
If you need further information or clarification about denial of indemnity, please do not delay and contact Unified Lawyers on 1300 667 461.
Insurance denial letter template
Coming soon. Contact us in the meantime for a sample denial letter.
Has your insurer denied your claim?
It is a common misconception that insurance covers all claims. Often, the party making a claim under a policy insurance is surprised when their insurer refuses to cover their claim.
When an insured makes a claim for indemnity under their policy of insurance, the insurer reserves its rights to decline indemnity. In plain language, this means that the insurer considers that the insured’s claim is not covered under the policy or contract of insurance.
This results in the insured being placed in a difficult situation with the prospect of defending against an uninsured loss. This may cause undue stress and significant costs.
If you receive a denial of indemnity or declinature letter, it is likely that the insurer has either:
- misinterpreted the policy
- made an incorrect decision to deny insurance
- made a decision which may not have had any standing
- made a decision without vital information
It is important to know that you do not have to accept the insurer’s decision and that the decision may be disputed.
If you want to know if your insurance claim should have been paid, make sure you seek the advice of an experienced insurance lawyer. Contact us if you need any help with your insurance appeal letter.