Top Reasons Your Car Insurance Claim will be Denied
We all know that it is important (and law-abiding) to have our vehicles insured. Maintaining your auto insurance keeps you legal and makes good financial sense.
What some people don’t know is this. Even if you pay your monthly auto insurance premium, there are circumstances where your auto insurance company will not pay for your claim. Here are some of the reasons why auto insurance carriers would deny your auto insurance claim (and have every right to do so).
Remember that television show “Pimp my Ride” where drivers were selected to have their cars modified and “tricked out?” As much fun as it can be to modify your car to make it just like you want it, it may not be the smartest move as far as you auto insurance company.
There are a lot of car modifications that can void the warranty on the car. This is a big no-no in the cheap car insurance world. Now adding some fuzzy dice and sheepskin seat covers isn’t going to cause any trouble, but changes to the function of your car like the engine, exhaust, and other major systems can cause your insurance company to deny a claim.
If you have major plans for your car, talk to you cheap car insurance provider first to make sure you will still be covered. In some cases, they may just make a note or may have to raise your rates a bit. In other situations they may drop you all together.
Failure to Pay
This may seem obvious, but many people have found out the hard way that not keeping up payments on your insurance premium can result in dropped coverage. If you know you can’t make your payments, talk to your insurance provider about any discounts or deals that you may be missing out on. At lease give them a head’s up that you can’t pay.
If you do get dropped, find some cheap auto insurance in NJ and try to get coverage back as soon as possible. If you can make semi-annual payments you may be able to get cheaper rates.
Insurance fraud sounds like a complicated scheme that you only see in the movies right? It’s more common than you think. A lot of people try to stretch the truth with their insurance companies. They may think it’s a harmless way to save a few bucks, but when they are found out they’ll likely be dropped – and possibly sued.
Insurance fraud can range from very serious charges to simple lying. Both are wrong and not worth the risk. The most serious would be faking an injury or damage to your car to get money. The lesser would be lying about your annual mileage or important concerns about your vehicle.
Not only can you get in serious trouble for lying or committing fraud, you’ll have a heck of a time finding a new insurance provider.
Driving on a Suspended License
Calling your insurance company might be the last thing on your mind after a DUI or other driving violation, but it should be one of the first things that you do. Insurance companies like to know what’s going on with your driving circumstances. In fact, they require that you keep them informed of things like “I’m not allowed to drive anymore.”
Should you get into an accident or have to file a claim for any reason while driving on a suspended license you may be out of luck getting that paid out. The best advice is to be open and honest about everything pertaining to your car and your driving to your insurance company.
Hopefully you are smarter than to defraud, lie to, cheat or just not pay your insurance company. The immediate and long-term consequences just aren’t worth it.
Remember that even just a little fib about the condition of your car, the mileage, or your driving record could be enough for your insurance to not pay out a claim and drop your coverage. Be smart and always be truthful with your insurance company.
7/11/11 UPDATE We experience a claims denial in the month of June. A 15 year client whom had a legitimate claim attempted to make more out of the claim than it originally was. She created more damage on her vehicle than was actually was suffered in the accident. When the auto insurance carrier discovered the fraudulent act – the claim was immediately denied. She got off easy, only losing a few hundred dollars. What most people don’t understand, insurance fraud is a legally punishable offence. Beyond having the claim denied, the insurance carrier can turn you into the police and you will go to jail. Fortunately; the insurance carrier in question felt the fraud was more a lapse in judgement than a complex plan to defraud the auto insurance carrier.