10 Reasons Why Your Insurance Claim Might Get Rejected

Insurance plays a critical role in helping individuals and businesses safeguard themselves against financial losses caused by unexpected events, such as accidents, illnesses, property damage, and more. However, despite paying premiums for years, many people find themselves in a difficult situation when their insurance claim gets rejected. The frustration, confusion, and financial burden caused by such rejections can be overwhelming.

Sometimes, insurance companies may reject a claim because their investigation reveals that the facts don’t align with your version of events. Insurance adjusters investigate claims thoroughly, and if they find inconsistencies or discrepancies, they might deny the claim.

In this blog post, we will explore the top 10 reasons why your insurance claim might get rejected. Whether you're dealing with health insurance, life insurance, investment insurance, Islamic insurance, motor insurance, travel insurance, or livestock insurance, the insights shared here can help you navigate the claims process more effectively.

1. Failure to Pay Premiums

One of the most common reasons for an insurance claim rejection is the failure to pay premiums. Insurance policies are based on regular payments made by policyholders to keep the coverage active. If you miss payments or fail to renew your policy on time, your coverage may lapse, rendering your claim invalid when you need it most.

How to Avoid This Issue:

• Set up automatic payments in bKash or reminders to ensure premiums are paid on time.
• Always double-check the payment status of your policy, especially during renewal periods.

2. Incorrect or Incomplete Information

One of the most avoidable reasons for claim rejection is submitting incorrect or incomplete information. Whether you are filing a motor insurance claim or a medical claim, providing the wrong details can cause delays or rejections.

For example, if you incorrectly report the date of an accident or fail to submit all required documents, the insurer may dismiss your claim.

How to Avoid This Issue:

• Double-check all forms and documents before submission.
• Ensure that you provide accurate and complete details.
• If in doubt, contact your insurance company for guidance.

3. Claims Made After the Policy Expired

One of the simplest yet most overlooked reasons for claim rejection is attempting to file a claim after the policy has expired. If your policy is not active—whether due to missed renewal, non-payment, or exceeding the policy term—any claims made during that inactive period are likely to be denied.

How to Avoid This Issue:

• Set reminders for your policy renewal dates and ensure timely payments.
• Regularly check the status of your policy to confirm it’s active and up to date.
• Maintain updated contact information with your insurer to receive renewal notices.
• Consider opting for auto-renewal options, if available, to avoid unintentional lapses in coverage.

4. Lack of Proper Documentation

Another common reason for insurance claim rejection is a lack of sufficient documentation. Insurers require specific documents, such as medical records, police reports, photographs of the damage, and more, depending on the type of claim.

If you fail to provide the necessary documentation or submit incomplete information, your claim could be denied.

How to Avoid This Issue:

• Make sure to gather all required documents before submitting your claim.
• Keep records and receipts for any expenses related to your claim.
• Work with your insurance agent to ensure that you’ve covered all necessary documentation.

5. Mismatched Policy Coverage

Sometimes, policyholders assume that they have certain types of coverage, only to realize later that their policy doesn’t cover the specific incident they are filing a claim for. For example, many auto insurance policies only cover accidents where the policyholder is at fault, while others may only offer liability coverage without comprehensive or collision coverage.

How to Avoid This Issue:

• Understand your coverage limits and types of insurance included in your policy.
• Review your insurance policy periodically to ensure that it still meets your needs.
• Consider adding extra coverage or riders to your policy if necessary.

6. Fraudulent Claims

Insurance companies take fraudulent claims seriously and investigate them thoroughly. If they believe that your claim is false or misleading, they may deny it and even take legal action against you. Fraudulent claims include exaggerating losses, providing false information, or attempting to claim for damage or losses that didn’t occur.

How to Avoid This Issue:

• Always be truthful and transparent when filing a claim.
• Avoid inflating damages or losses to get a higher payout.
• Understand that fraudulent claims can lead to severe consequences, including legal penalties.

7. Failure to Follow the Terms and Conditions of Coverage

Insurance policies are designed to protect against specific unexpected events, such as cancellations, lost belongings, or medical emergencies. However, claims can be denied if the policyholder does not adhere to the stated terms and conditions. For instance, some policies may require timely notification of incidents or may not cover cancellations due to personal preference or reasons not listed in the policy.

How to Avoid This Issue:

• Understand the covered reasons for claims before purchasing the policy.
• Maintain records such as receipts, relevant documents, or reports that may support a future claim.
• Review the policy details to become familiar with what is and isn’t covered.

8. Non-Disclosure of Material Facts

When you apply for an insurance policy, you are required to disclose all material facts that may affect the insurer's decision to provide coverage. If you fail to disclose relevant information, such as pre-existing conditions (in the case of health insurance) or previous accidents (in the case of motor insurance), your claim may be rejected.

How to Avoid This Issue:

• Always be honest and provide complete information when applying for insurance.
• If you are unsure about whether something should be disclosed, it’s better to discuss it with your insurer.

9. Exclusions in the Policy

Every insurance policy includes specific exclusions—situations, conditions, or events that are not covered. Many claims are rejected simply because the event or loss falls under one of these exclusions. For example, some health policies may not cover cosmetic procedures, and motor insurance may exclude damage caused during illegal activities or driving without a valid license.

How to Avoid This Issue:

• Carefully review the exclusion section of your policy to understand what isn’t covered.
• Ask your insurer for clarification if any exclusions are unclear.
• Do not assume all situations are covered—when in doubt, confirm before taking action.

10. Delay in Filing Police Reports

For motor accidents, thefts, or other criminal-related claims, the absence of a police report can be a significant red flag for insurance companies. Many insurers require a timely police report to verify the details of the claim. If you don’t file a report or delay doing so, your claim might be rejected.

How to Avoid This Issue:

• Always file a police report after an accident, theft, or other criminal activity.
• Submit the police report along with your insurance claim as soon as possible.

Conclusion

Insurance claims can be a lifeline in times of need, but they come with a set of rules and guidelines that must be followed carefully. By understanding the common reasons why claims are rejected, you can avoid costly mistakes and ensure that you are fully prepared when filing a claim.

Whether it’s paying your premiums on time, submitting accurate information, or following the right procedures, being proactive can help you maximize your chances of getting the compensation you deserve.

Always read your policy thoroughly, maintain open communication with your insurer, and seek advice if you are unsure about any part of the claims process. By taking these steps, you can reduce the risk of rejection and have peace of mind knowing you are properly covered.