Insurance is a necessary expense if you want to protect your home, belongings, car, and anything else you hold dear. In some cases, insurance is mandatory, i.e., if your home is mortgaged, the lender will insist you buy buildings insurance.
However, while we understand the need to have insurance, sometimes a policy is invalidated and when we come to make a claim, the insurer refuses to pay out. Why does this happen? Let’s find out.
You Withheld Information
One of the most common reasons why an insurance claim is refused is that the claimant withheld information when they took out the policy. For example, if you buy travel insurance but don’t tell the insurer about an existing medical problem, then try to claim for a complication of this, the insurer will refuse to pay out when they access your medical records.
You must be honest with an insurer when you buy cover. Insurers price and underwrite policies based on the information they receive. If you lie to secure a cheaper policy, it will catch up with you eventually.
If you’re looking for personal insurance quotes for your home or anything else, be very careful that you provide accurate information.
You Didn’t Read the Small Print
It is easy to fall foul of an insurance company by failing to read the small print. Always double-check that the policy you buy has coverage for the things you need to protect. For example, if you plan on going sky diving while on vacation in Mexico, make sure your travel insurance covers risky activities, or you could find yourself in hot water in the event of an accident.
You Used the Wrong Provider
This one applies to medical insurance. Many medical insurance companies insist that policyholders use specific providers in their network because they have price agreements with these providers. If you use a provider that is not in your insurance company’s network, you may find your claim isn’t paid out.
There are Errors in Your Claim
It’s easy to make errors when filling out complex paperwork, but even small errors will lengthen the time it takes to process your claim and the insurance company may refuse to pay you.
Take your time when filling out an insurance application or a claims form. Double-check that all the information you provide is correct. The silliest of errors, such as stating your home has three bedrooms instead of four could invalidate a future claim.
You Missed a Payment
Missing a payment will give the insurance company a valid excuse to refuse your claim. Do not make this mistake!
Make sure payments are set to leave your bank account automatically. Don’t rely on memory to renew your policy, as our memories are not infallible. If there isn’t enough money in the account when the payment is due, consider the implications of not being insured before you let the policy lapse.
Insurance is a complex area and it’s easy to be caught out when making a claim. Be vigilant and it won’t happen to you.
