A reliable insurance policy is a great thing, but it is also incredibly rare. As in other industries, insurance representatives are motivated to save the company money, but to do this, they sometimes deny their enrollees’ claims. In many situations, insurance claim denials can arise from trivial mistakes or even out of bad faith, which is both unethical and illegal.
Regardless of the reason, you have a right to an appeal or even hire a lawyer to communicate with the insurance company and handle your claim for you. Learn about the common reasons that insurance claims are denied below and what you can do if you have been unfairly denied coverage.
Table of Contents
Common Reasons Why Insurance Companies Deny Claims
When an insurance claim has been denied, the first step is to find out why. In many cases, claim denial notices are unclear or ambiguous, and many enrollees find it difficult to reach their representatives directly. Your claim might have been denied for one of these common reasons:
- Incomplete or Incorrect Information: Errors in your claim form, such as missing details or incorrect codes, can lead to automatic denial.
- Lack of Medical Necessity: Health insurance companies are notorious for denying their enrollees based on what the company feels is “medically unnecessary.” The good news is that an insurance lawyer can determine whether or not the company’s assessment was fair or not and can advocate for you if the denial was made in error or bad faith.
- Policy Exclusions: If your policy does not include the requested treatment, your claim can be denied. However, policies can change over time, which means that you may be owed coverage if the policy was changed during enrollment.
- Out-Of-Network-Provider: If you received care from a provider who is not in your insurance network, your claim may be denied or only partially covered.
- No Pre-Authorization: Some treatments and procedures require prior approval from the insurance company, and claims can be denied if this step is skipped.
- Missed Deadline: You will only have a certain number of days to file an insurance claim following the incident that requires coverage (such as a car accident or injury). Once the deadline has passed, the insurance company will deny your claim.
- Claims Processing Errors: Sometimes, claims are denied due to administrative mistakes, such as misfiled paperwork or processing delays.
Can You Be Denied Health Insurance for a Pre-Existing Condition?
In the vast majority of cases, no. Under the Affordable Care Act, health insurance companies are not allowed to deny coverage to any enrollees for a pre-existing condition, so long as their policy was purchased after March 2010. They are also not allowed to charge higher premiums for pre-existing conditions.
Can You Be Denied Homeowners Insurance?
Yes, there are many reasons that someone may be denied homeowners insurance. These denials are usually based on reasons such as poor conditions, code violations, locations, or a history of natural disasters. Additionally, a poor credit score or a history of late payments can also impact eligibility.
If you have been denied, you may be able to find coverage through state-backed insurance programs or specialized high-risk insurers or hire a lawyer to do so on your behalf.
Can You Be Denied Car Insurance?
Yes, especially if you are responsible for the car accident that inspired the claim. Other reasons might include a history of car accidents or traffic violations or living in an area where the risk of car theft or break-in is higher. However, if this is the reason your claim has been denied, your state might have laws that require your insurance company to provide at least minimum coverage.
How to Appeal a Health Insurance Claim Denial
Though a claim denial is incredibly frustrating, the law gives you the right to an appeal regardless of the reason for denial. Here is the general process:
- If you are unsure why your claim was denied, find out why.
- Call your insurance representative directly or have a lawyer do so on your behalf.
- If the reason for denial is missing information, ask what information or documents they need to approve the claim.
- Keep records of all interactions with your insurance representative including conversation times, emails, or letters.
- File an official appeal to initiate the process and keep track of any deadlines that may apply.
Taking on an insurance company is never a simple task. An appeals process is incredibly complicated and the insurance company likely has an in-house legal team just to devise ways to throw off appeal attempts. To help your chances at success, it is always a good idea to consider hiring a lawyer to handle your appeal for you.
If you are concerned about cost, many experienced insurance dispute lawyers work on contingency, which means that you pay nothing unless you win your appeal.
What Can You Do if Your Appeal Was Denied?
Losing an appeal is disheartening, but it is not the final option. If you lost your insurance denial appeal, a lawyer can also help you:
- Request an External Review: Federal law allows for an independent third-party review of your case. If the external reviewer overturns the denial, the insurer must comply.
- File a Complaint: If you believe your claim was unfairly denied, your lawyer can file a complaint with your state’s insurance department or, for health insurance, the U.S. Department of Health and Human Services.
- Explore Other Insurance Options: If you decide to cut your losses, look into alternative financial assistance programs, nonprofit aid, or different insurance policies. If you find something that meets your needs, your lawyer can advise you on the next steps or help you apply.
Can You Be Denied Medical Treatment without Insurance?
If your condition is life-threatening, no. Under the Emergency Medical Treatment and Labor Act, hospitals that receive Medicare funding are required to provide emergency care to all patients, regardless of their ability to pay. That said, you may still be billed for your services later, and if your condition is not directly life-threatening (requiring an emergency room visit), you will be denied treatment.
Can You Sue Your Insurance Company for a Denial?
Absolutely. There are laws in place that aim to protect enrollees from predatory tactics commonly used by insurance companies to deny claims. If you believe that your claim was unfairly denied, you have the right to pursue legal action against them and seek compensation for the damages sustained as a result of their denial including:
- Medical bills incurred
- Pain and suffering or a disability resulting from an untreated medical condition
- Emotional trauma
- Damage to your vehicle
- Missing wages due to an untreated injury or damaged vehicle
Talk to a Lawyer if You Feel Your Claim Was Unfairly Denied
Whether you have just received notice of your claim being denied, you need help filing an appeal, or you have already lost an appeal and want to know what other options are available to you, hiring an insurance claim denial attorney is almost always the best measure you can take. Remember, when an insurance company approves a claim, they lose money, which can motivate them to make more appeals than necessary or even break the law if they think that they can get away with it. Talk to a professional who understands insurance laws and can advocate on your behalf.