What are 3 reasons a claim could be denied by an insurance company?

Answer 1

A claim can be denied for a number of reasons, but three examples are"

1. The policy was not in force at the time of the loss. This can occur if the policy never went into force (such as due to the first premium not having been paid), or because it lapsed because subsequent premiums were not paid.

2. The terms of the policy did not cover the type of loss involved. Insurance policies are issued to provide protection for specified categories of risks, If the loss did not fall within the ambit of coverage, it would be denied. Even if arguably within the scope of coverage, an exception or an exclusion to coverage, as stated in the policy, may apply.

3. Misrepresentation of a material fact when applying for the insurance. Insurers rely upon the truth of the answers given by the applicant when issuing a policy. If a loss occurs and the insurer discovers that there had been a material misrepresentation of fact when applying for the policy, coverage could be denied. A misrepresentation is generally held to be material if, had a truthful answer been given to the question, the insurer would have not issued the policy or, if it would have, only at a higher premium.