9 top reasons your claim is denied
Let’s take a look at the nine most common reasons for a claim being denied and how to keep them from happening to you.
1. Incomplete information
Claims often get denied due to incomplete information. A missing document or an error in your submission can be the culprit. It's important to review your claim meticulously. Checking for any oversights can make a significant difference. Always ensure that every required piece of information is accurately provided. Incomplete claims are one of the easiest issues to fix with thorough attention to detail.
2. Service not covered
Another common cause for denial is the service not being covered under your policy. Knowing what your policy covers and doesn't cover is vital. Sometimes, the fine print holds the key to understanding your coverage. It’s also a good practice to confirm coverage before proceeding with a service, repair or procedure.
3. Claim filed too late
Filing a claim too late is also a frequent issue. Most policies have strict deadlines for claim submissions. Missing these deadlines can result in an automatic denial. Always be aware of the time frame you have to file your claim. Setting reminders or keeping a calendar can be helpful. Late submissions are difficult to overturn, so timeliness is key.
4. Coding or billing error
Incorrect coding or billing errors are often to blame for denied claims as well, particularly for health insurance claims. In medical billing, a single digit can change the entire claim. Ensure that all codes and billing information are accurate. Double-checking these details can save you from a denial. If you’re not sure about the coding, consult with the healthcare provider or billing department.
5. Insurer believes the procedure wasn’t necessary
Sometimes, the denial is because the claim is deemed unnecessary. This is especially common in medical insurance claims. If your insurance company thinks a procedure wasn't needed, they might refuse to pay. Providing additional information or a doctor's note can sometimes help in these cases. Discussing with your doctor how to demonstrate the necessity of the procedure can be beneficial.
6. Duplicate claim filed
Denials due to duplicate claims are not uncommon. This happens when a claim is mistakenly filed more than once. It's an easy fix but requires attention. Always keep track of your claim submissions to avoid this issue. A simple organizational system for your paperwork can prevent such mistakes.
7. Pre-existing condition not covered
Pre-existing conditions can also lead to claim denials. Many insurance policies have clauses about pre-existing issues. We think of pre-existing conditions mostly in terms of health insurance or pet insurance; however, this can also apply to pre-existing damage to your home or car. For example, you can’t claim normal wear and tear on your roof as damage unless a covered peril caused it. Understanding these clauses is crucial before you file a claim. It helps to know exactly what your policy states about such conditions. If your claim is related to a pre-existing condition, being upfront and clear about it in your submission can help.
8. Lack of pre-authorization
Lack of pre-authorization is another reason for denials. Certain procedures or services require prior approval from your insurance provider. Not having this approval can result in your claim being rejected. Always check if pre-authorization is needed for your specific situation. It’s a proactive step that can prevent future headaches.
9. Policy had lapsed
Filing a claim after a policy has lapsed happens more often than you’d think, particularly with life insurance claims. The best way to prevent this from happening is to have your premium debited from your bank account on a monthly basis. You won’t have to worry about the bill getting lost or getting so busy that you forget to pay your premium on time.