Navigating claim denials: What to do if your claim is rejected

9 common reasons claims are denied and how to avoid them

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Bob Phillips

Personal Finance Writer

Bob Phillips is a personal finance writer whose expertise in insurance and investments has been developed through over fifteen years as an advisor/tr…

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Ross Martin

Insurance Writer

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  • 4+ years in the Insurance Industry

Ross joined The Zebra as a writer and researcher in 2019. He specializes in writing insurance content to help shoppers make informed decisions.

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Susan Meyer

Senior Editorial Manager

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  • Licensed Insurance Agent — Property and Casualty

Susan is a licensed insurance agent and has worked as a writer and editor for over 10 years across a number of industries. She has worked at The Zebr…

You've just received a notice from the insurance company: your claim has been denied. It's a moment filled with frustration and confusion. 

Understanding why claims get denied can help you resolve any problems with a claim you're currently having and help eliminate the chance that you'll go through this again. This guide is here to help you through the process, providing insights about claim denials and steps to take if or when you get the dreaded denial letter.

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.

What to do if your claim is denied

When your claim is denied, don't lose hope. 

The first step is to read the denial letter carefully. It usually contains the reason for the denial. Understanding this reason is key to figuring out your next steps. Sometimes, the explanation provided can lead you directly to the solution.

1. If the denial is due to a simple error

Correct the error and resubmit your claim. This might involve submitting additional documents or correcting a form. Sometimes, a small fix is all it takes to get your claim approved. Don't overlook the potential of a simple resubmission; it often solves the issue.

2. If the reason for denial is unclear

Contact your insurance provider. Ask for a detailed explanation of why your claim was denied. Direct communication can often clarify misunderstandings or provide more insight. Being persistent and asking questions can uncover information that is not obvious at first glance.

3. If you disagree with the denial

Consider filing an appeal. Most insurance policies provide a process for appealing denials. This process can be time-consuming, but it's worth it if you believe your claim is valid. Understand the appeal process and adhere strictly to the guidelines provided.

Gathering documentation to support your appeal is crucial. This can include (as relevant): medical records, doctor's notes, or policy documents. The more evidence you have to support your claim, the better your chances of a successful appeal. Organizing your documentation and presenting a clear case can significantly influence the outcome.

4. If you need additional help

Finally, don't hesitate to seek professional help if needed. This can include legal advice or a claims specialist. Sometimes, having an expert on your side can make all the difference in navigating the complex world of claim denials. Their expertise can provide you with the guidance and support you need to successfully resolve your claim denial.

If all else fails, contact your state’s insurance commissioner. Their function is to help consumers be treated fairly by insurance companies. If your insurer has been unresponsive or you believe they’ve acted unethically, the commissioner’s office can often help rectify the situation.

Wrapping up

The stress of an accident or a home repair is bad enough without having to worry about a claim denial. In the event of a claim, remember to document everything, review your policy thoroughly and keep all your paperwork in order.