How to prevent your insurance claim from being rejected

Bessie Hassan is a money expert at finder.com.au

New research from finder.com.au shows that one in six Australians have had an insurance claim rejected – and it’s potentially due to human error.

It seems that the most complicated claims see the highest rejection rate, with 50% of life insurance claims being knocked back, as well as 41% of car insurance claims. These types of insurance typically involve a more extensive claims process than other types of insurance, which could be why there’s such a high rejection rate.

People from New South Wales and Western Australia are the most likely to have a claim rejected, and those in generation Y are over three times more likely to have a claim rejected, with 28% of claims being rejected compared to only 8% of baby boomer claims.

So how can you make your claim watertight?

It’s important to be aware that each type of insurance has a different claims process. That being said, there are a few universal ways that you can ensure that your claim is less likely to be rejected.

Firstly, know your product and your rights. Before you spend time making a claim, make sure that you’re actually entitled to benefits. It’s common for people to skip over the product disclosure statement (PDS) when taking out a policy, but this is where any exclusions are listed, so it’s important to read through it thoroughly so that you know the ins and outs of your cover.

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For example, for life insurance and income protection insurance, exclusions can include genetic conditions that haven’t been disclosed and pre-existing conditions including mental illness. If you want to make a claim for one of these issues, it may be rejected.

Incorrect paperwork is also one of the biggest problems when making a claim. If you want to make a claim on your comprehensive car insurance after a car accident, for example, make sure you know all the details of the incident, including the other driver’s license number, number plate and exact address, the date and time of the accident and a detailed account of the events that took place. It’s also important to contact any witnesses so that they can provide a supportive recount if needed. Essentially, you need to provide your insurer with as much detail as possible so that they can’t find any reason to reject or question your claim.

A doctor’s sign off is also vital for some types of insurance claims. For life insurance, income protection insurance and total and permanent disability or trauma insurance claims, it’s vital to not only divulge any relevant medical information to your insurer, but also to seek medical approval.

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Although one doctor might be easily disputed by your insurer’s resident doctor, if you provide three medical opinions it will be much harder to dispute. The more professional expertise you supply, the harder it will be to reject the claim.

At the end of the day, it’s about making sure that you present all of the facts and provide every possible detail so that you are able to make a claim and receive all of the benefits that you are entitled to.