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Most Common Reasons Why Insurance Claims Get Denied

If you get injured or suffer property damage in an accident in Fort Collins, you may be eligible for financial compensation through an insurance claim. Unfortunately, insurance companies are not always forthright with the benefits they owe claimants. They may deny a claim for many reasons – or, in a case of insurance bad faith – no reason at all. This can make it difficult to receive the compensation you deserve without help from a Colorado bad faith insurance attorney.


In a claim denial letter, an insurance company may explain that the claim was rejected due to a technicality. This could mean an error made on the claim paperwork, such as missing important information. It could also mean that you filed your claim too late and missed the insurance company’s deadline. Be sure to ask exactly why your claim was denied if this was not made clear. You may be able to remedy the issue or error, such as by correcting paperwork or providing further proof of losses.

Lack of Coverage

An insurer may also reject benefits based on a lack of coverage available on the policy. For example, the policy may not have the correct type of coverage for the damages you are claiming (e.g., if you do not have first-party car insurance coverage, your own company may deny a claim you file). Some insurance plans have limitations on the events that they cover, such as a car accident vs. act of god. The policy may have also expired due to nonpayment.

Liability Dispute

Another common reason for insurance claim denials is a liability dispute. An insurance company may try to blame you for the accident, for example, or place liability on a third party. You may need to hire a law firm to investigate your accident and prove liability for you. Do not admit fault for an accident during conversations with the insurance claims adjuster. Even if you did contribute to the accident, Colorado law allows you to receive partial financial compensation, as long as you are less than 51 percent at fault. Do not accept a claim rejection based on a liability dispute until contacting an attorney to look into fault.

Failure to Seek Medical Care

Most insurance companies require claimants to seek medical attention for their injuries immediately after a harmful accident. A delay in obtaining medical care could give the insurer a reason to reject benefits. For instance, the insurance company may try to argue that the claimant’s injuries are worse than they would have been had the victim gone to the hospital right away. This could lead to a diminished settlement value or denied claim.

Failing to receive an approved type of medical care could also lead to a claim denial. For example, many insurance companies do not cover holistic medicine, experimental or investigational treatment, or alternative medicine. The insurance company may cite “Services Not Appropriate or Authorized” as a reason for this type of denial. This can also mean that the insurance company believes the services you received were not medically necessary.

Pre-Existing Condition

If given access, an insurance company may dive deep into your medical history to search for reasons to deny your claim, such as a pre-existing injury. For this reason, you should not sign a Medical Authorization Release Form sent to you by an insurer until it has been reviewed by an attorney. Know, however, that a pre-existing injury does not automatically exclude you from insurance benefits. If the accident or event exacerbated your pre-existing injury or medical condition, you could still qualify for benefits for the difference in your health now compared to before the accident.

You Don’t Have to Accept a Claim Denial

If your insurance claim recently got denied, you have the right to appeal the decision. You can do this by requesting an internal review from the insurance company or an external review by an unbiased third party, such as the Colorado Division of Insurance. You can also hire an attorney to help you appeal a denial and potentially file a bad faith insurance claim. This is a lawsuit brought against an insurance company for knowingly and intentionally mishandling a claim. You may qualify for compensation for insurance bad faith in the form of a wrongful claim denial.