An insurance company cannot deny coverage for a paying customer in very limited circumstances. A policy offered by an insurance company to a customer is usually for six months and covers any driver who happens during that period. The company must pay for the customer’s injuries in an accident that is not their fault. However, they may choose to cancel the policy at the next renewal. The company is still responsible for any damages resulting from an accident that occurred within the coverage period.
There are exceptions to this rule. If the company does not meet the requirements of the policy, it can decline to pay the claim. Some policies may exclude or have exclusions, such as illegal actions or non-payment of premiums.
Violation of the Law
You are usually exempt from any insurance claims if you use your vehicle in violation of the law. An example of this is if an insured person permits his or her vehicle to be used for the commission or robbery of another vehicle (regardless of whether the insured driver was driving the car). The insurance company could claim exclusion to the policy because illegal acts are not covered. Many companies also have DUI exclusions. This means that any damages resulting from an accident in which the insured driver’s blood alcohol content (or BAC) was higher than the legal limit are not covered.
Careless and reckless use of the vehicle
Insurance companies will not exclude illegal acts. Insurance companies may exclude coverage if the insured driver of the vehicle is found to have used the vehicle in dangerous or careless ways. An example of this is if an individual allows another person to drive their car, but they do not have a driver’s licence. This type exclusion may lead to the insurance company denying coverage.
Inability to Pay Premiums
Insurance companies often raise non-payment as a concern when they are required to pay claims. Coverage may be affected if a person falls behind in paying his or her premium. Most states have a grace period during which coverage is mandatory even if the premium is not paid on time. However, coverage could be denied if the person falls outside of the grace period for payment.
Claims For Damages Other Than Your Policy Coverage
A claim may be denied depending on what coverage you have. If you decide to drop your comprehensive coverage, the company may deny you any claims that would have been covered by your comprehensive policy. This covers theft, weather-related injuries, and accidents that are not caused by a collision with another vehicle. Collision insurance also covers you if your vehicle is damaged in an accident that you were at fault. Your company won’t pay for your vehicle to be repaired if your collision coverage is dropped.
Except for these exceptions, insurance companies cannot legally deny a claim. If insurance companies offer you a policy and collect your premium payment, they are legally bound to pay all claims that are covered by the policy. This includes payment to any other parties if you are responsible for the accident.
An insurance company can “fight” any claim made by another party if they feel the other party is actually at fault. Some states allow liability insurance to be assessed on a percentage basis. This means that if both parties are at fault, the court can determine how much responsibility each party has.
