Insurance policies are supposed to help the insured obtain financial aid in times of incidents directly affecting their health, rendering them ill, injured, or disabled. The policies may cover road and workplace accidents. Policyholders are given the privilege to ask for claims from the insurance company because after all, that’s what they paid premiums for.
However, odd and unfair as it may sound, there are instances where insurance companies deny or reject claims. Some have valid reasons, but it’s also possible that the insurance company is acting unjustly. Discover some of the reasons for rejected and denied claims, and what claimants could do to defend their rights.
Denied vs. Rejected Claims
Denied and rejected claims are different. Denial of claims happens when the insurance company disapproves payment for a particular claim. For example, a health insurance company refusing to pay for medical tests, procedures, or prescriptions.
Rejected claims, on the other hand, are claims that aren’t processed at all due to incorrect information given by the claimant. If your claim is rejected, you only need to correct the erroneous information and re-submit it to the company. Afterwards, they should be able to process your claim.
Possible Reasons For Denials
- Incorrect information. This may also result in denial instead of a mere rejection. The medical bill may have errors or the claimant may not have complied with the submission requirements.
- Coverage exclusions. The injury or health issue may not be included in the policy’s coverage. In some cases, some medical treatments may be considered medically unnecessary. However, there could also be illegal exclusions.
- Policy expiration. Insurance policies also have an expiration, and they’re not automatically renewed in most cases, so policy-holders should keep track of their insurance.
- Delay in treatment. This is the failure of a claimant to seek immediate treatment after sustaining the injury.
- Limited or absence of medical records. The insurance company may claim that no injury occurred if the claimant failed to present substantial medical records.
- Treatment is out of the claimant’s health plan. If the drugs or therapy received isn’t part of the claimant’s health plan, claims can be denied.
- Out-of-network services. In a Health Maintenance Organization (HMO) policy, policy-holders are only allowed to seek treatment from doctors who are part of the HMO network; therefore, they won’t be given claims if they received healthcare from out-of-network providers.
- Preexisting condition. The insurance company may claim that the injury was sustained from a preexisting condition, and not from the accident the claimant reported.
- Failure to prevent or mitigate injuries. For example, if you had a car accident and did not immediately seek treatment, then repeatedly postponed receiving your follow-up treatments, the insurance company may declare that you failed to act reasonably after getting injured, prompting them to deny your claims.
What Claimants Can Do
Denied claimants can appeal the insurance company’s decision by submitting a letter, containing an opening statement about the denial, a detailed explanation on their condition or injury, and a supporting statement from their doctor. The appeal should be sent within the time limits to avoid further trouble.
Insurance companies may also be held legally accountable for denying claims. They could be acting in bad faith, meaning a breach of their duty to treat their policyholders justly and reasonably. If the insurance company failed to investigate the claimant’s injuries, or wrongfully denied payment to a valid claim, claimants can turn to an experienced bad faith insurance lawyer from Los Angeles or other cities. If the insurance company is proven to engage in bad faith, they may be liable for fraud or purposeful imposition of emotional distress. In turn, the claimant may demand compensation for damages.
Before filing for claims, be sure to review your policy and understand its terms properly. Being knowledgeable about your policy will help you avoid stressful scenarios when you need to file for a claim.