Why do insurance companies deny coverage

They're more likely to pay their insurance premiums on time. Of course, a low credit score doesn't necessarily mean you're irresponsible. Your score may have dropped after you got laid off and fell behind on bills or when you were out of work for a medical reason. Harzog recommends that if your credit score is low or your credit history reflects late payments and you're worried those will prevent you from getting coverage, you should call insurers directly to explain your circumstances.

That doesn't guarantee that they will approve your application, but they may factor those extenuating elements into the decision. Even if you are not denied coverage because of bad credit, you may pay more for car insurance than drivers with higher credit scores.

It's essential to request quotes from several different providers so you can find the lowest rate in your area. MoneyGeek found that Geico and Nationwide offer lower average rates for customers with bad credit than other providers. But rates may vary based on where you live. In addition to your credit score, Harzog noted that car insurance companies might also check your credit report to review your payment history and credit utilization ratio how much you owe vs.

Harzog also said that having several recent hard inquiries on your credit could be a red flag for insurers. Insurance companies can also weigh factors such as your age and where you live in their coverage decisions. A driver in their late teens will likely pay more than a middle-aged driver, while someone who lives near a notoriously dangerous intersection will probably be charged a higher premium than someone who lives in a sleepier neighborhood.

If there's been a spike in car break-ins near you recently, you can also expect that to affect your insurance options. The first step after being denied car insurance is to shop around for a policy and apply with other providers. Your state may allow you to take an approved defensive driving course to lower your number of points.

This could also help you qualify for a discount with insurance carriers and ultimately lower your premiums. Improving credit may not be synonymous with better insurance rates , but the two go hand in hand in many states — excluding California, Hawaii, Massachusetts, Michigan and Washington.

The higher your credit score, the less risky the insurance carrier may find you. Start by requesting a copy of your credit report and checking for accuracy. Dispute any errors you may find. You are entitled to a free credit report each year via one of the three credit bureaus , at which time you can also view your credit score.

Once you understand your credit score and report, you can work on paying each of your bills on time and paying down overall debt to begin improving your score.

Not only does credit improvement help with auto insurance, but it could also improve your interest rates for vehicle loans, mortgages and other financial products. One of the most effective strategies for improving chances of finding coverage is allowing enough time to pass between reapplying for quotes.

If your coverage was denied because the vehicle you drive is considered too risky, it might be worth considering a safer option. There are numerous vehicles that insurance carriers consider to be less of a risk, which could make finding coverage easier. However, exact premiums are highly dependent on personal factors. Depending on your state and the factors it allows for insurance underwriting, your ZIP code, age, gender, vehicle, driving history or credit score could influence your premium.

Finding the best coverage for the right cost is easier when you compare several insurance carriers. Not only will it help determine which company offers the lowest rates , but you can also check which discount and coverage options are available. An SR form is typically needed every year for three years.

As a high-risk driver in need of an SR, you should prepare to pay higher premiums overall for high-risk insurance, although working toward safe driving habits could reduce your risk over time. How We Make Money. Sara Coleman. Written by. Sara Coleman has three years of experience in writing for insurance domains such as Bankrate, The Simple Dollar, Reviews.

Edited By Mariah Posey. Edited by. Mariah Posey. Mariah Posey is an insurance writer and editor for Bankrate. She aims to make the insurance journey as convenient as possible by …. Share this page. Bankrate Logo Why you can trust Bankrate. We guide you throughout your search and help you understand your coverage options. We provide up-to-date, reliable market information to help you make confident decisions. We reduce industry jargon so you get the clearest form of information possible.

Many infuriating denials only require a phone call clarifying the condition and indication. Again, before calling make sure that the treatment you wish to have covered isn't explicitly excluded from your plan. For example, even if you have an acceptable indication, insurers won't likely pay for medical marijuana.

In a case such as this, your insurance won't pay no matter what condition you have or symptoms you are coping with. If you are denied care by your payer, there are a few things you can do.

Other tips that might help this process go smoother include:. Health insurance denials can be terribly frustrating when you are the patient. Even more so when your healthcare provider believes you should have a particular test or treatment. It's easy to become angry and want to scream. Instead, it's often best to think carefully through your options. As a first step, talk to your healthcare provider about alternatives that are covered. Knowing these options, you can then objectify your situation by listing out pros and cons for both the covered and non-covered treatments.

Every person is different and there may be clear indications why one treatment is better either in efficacy or side effects than another based on your particular medical situation.

Many healthcare providers will "go to bat" for you if this is the case. If it honestly appears that the non-covered test or treatment would be better for you, don't give up. Fight the denial.

As you do this, keep in mind that insurers are looking at numbers when making decisions, and people aren't statistics. Your insurer has only limited information when reviewing your request, and sometimes simply needs a little more "education" into your condition and personal medical history to recognize the need for the desired treatment.

Even if your insurer ultimately denies your treatment, after you fight the denial keep in mind that they are not the ultimate authority on your health. Though it may be a major expense, the option to self-pay still remains. If you don't have the money in your checking account, as most people do not, consider ways to fund the treatment such as taking out another mortgage, borrowing from friends and family, using Go Fund Me pages on Facebook, having a fundraiser and much more.

If you go this route, remember that medical expenses you pay for out of pocket are often tax-deductible, and in a situation such as this, often add up to give significant relief. Sign up for our Health Tip of the Day newsletter, and receive daily tips that will help you live your healthiest life. How to Appeal an Insurance Company Decision.

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