CAUSES OF REJECTED INSURANCE CLAIMS The insured who has insured his property or other interests certainly hopes that in the event of …
The insured who has insured his property or other interests certainly hopes that in the event of a claim, the claim submitted will be paid by the Insurer / Insurance Company. However, many of these expectations are not appropriate, the claims submitted are rejected for various reasons by the insurance company.
Here are some causes of claim rejection by insurance companies:
- Premiums have not been paid or paid after a claim. The policy generally contains a provision that the premium must be paid within a certain period. For example 30 (thirty) days after the start of the insurance period. Or if the premium paid is in large amounts there are payment terms with installments. In insurance there is a term no premium no cover. So if the premium payment period has been exceeded and the premium has not been paid, there is no cover.
- Late claim notification, in the policy there are provisions for the reporting period or claim notification. The insured in accordance with the provisions of the policy must notify the claim according to the specified period / time frame. The reason for this rejection can still be argued if the delay in notification is due to causes that are beyond the power of the Insured.
- Claims excluded/not covered by the policy. In the policy there are provisions related to risks that are not guaranteed by the policy. If it turns out that the cause of loss is an excluded risk, it is certain that the insurer will reject the claim.
- The insured violates the terms of the policy or breach of policy’s condition. For example, in the policy, there is a provision that the insured cargo must be delivered with packaging and in a container. But it turns out that at the time of the claim the cargo is not in packaging and not in a container or another example of a vehicle that has an accident the driver does not have a driver’s license.
- The insured conceals material facts related to the object of coverage or the disease suffered before the insurance is covered. Example: to close life insurance, the insured is required to fill out the SPPA (Insurance Closing Application Letter), in the SPPA there is a question that asks whether the prospective insured has a history of congenital disease (pre existing condition), in the SPPA answered no. Then at the time of the claim, the insurance company checks the medical record and interviews the family and finds that the insured died because of a congenital disease that had been covered by insurance. Then at the time of the claim, the insurance company checked the medical record and interviewed the family and found that the insured died because of a congenital disease that had been suffered for years.
- The insured whose name is listed in the policy does not have an insurable interest. For example, someone rents a building then he insures the building and its contents (the contents of the building belonging to the tenant), a fire occurs. Then the reimbursement is only for the contents of the building while the building does not get reimbursed because the tenant does not have an insurable interest.
- There is a change in the object of coverage so that the risk of the object of coverage changes to be higher. For example, the object of coverage in the form of a shophouse was previously used to sell groceries, during the insurance period the designation changed to a motorcycle repair shop without notice to the Insurer.
- The object of coverage operates outside the location specified in the policy. The movement of the insured object must be notified to the Insurer unless the policy contains provisions that allow the movement of the insured object to another location with the terms and conditions stipulated in the policy.
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