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4 reasons your auto insurance claim could be denied

Aug. 4, 2022
4 mins
An older woman looking worried at documents

When you buy a car in Canada, you’re legally obligated to get car insurance. Since all car owners are paying for insurance, we assume that if we get into a collision, our insurance companies will cover any damages that ensue.

However, there are certain cases when insurance companies have the right to deny insurance claims. Here are some of the most common reasons for why your insurance claim could be denied:

1. Your car insurance claim is fraudulent

If your insurance provider has reason to believe that your claim may be fraudulent, it has the right to deny it. Fraudulent claims can include anything as overt as lying about who was operating the vehicle at the time of the collision to staging an accident, to having fudged some of your personal information when you set up your policy.

Being dishonest with your insurance company, whether about the accident itself or about any other related information, can be used as grounds to deny your insurance claim.

2. Your claim requires additional coverage that is not included in your policy

When purchasing a car, all vehicle owners are required to secure car insurance. The bare minimum mandatory coverage is third-party liability insurance, which covers you in the event that you damage another person’s property or injure them in a collision you’re found at fault for.

Collision and comprehensive insurance, on the other hand, are optional coverages that pay for the damages incurred by the policyholder’s vehicle, regardless of fault. Collision coverage pays out if you hit another vehicle or object with your car. And comprehensive insurance pays out if your vehicle is damaged from things like hail, theft, and vandalism. Although these coverages come at an additional cost, they can save car owners a lot of money. To ensure you’re getting optimal coverage at the best price, it’s important to always compare different auto insurance rates.

3. You submitted insufficient documentation with your car insurance claim

When filing an insurance claim, it’s important that you submit all the appropriate documentation. This may include:

  • Bills and invoices
  • Licences
  • Collision report, including any photos
  • Medical records

If you’re missing any of the required documentation, your insurance company could deny your claim. However, you can resubmit your documentation as long as it falls within the allotted time frame.

If you require medical coverage for any injuries that resulted from the accident, it’s important to obtain medical records that support this. Otherwise, your insurance company could reject your claim by arguing that your injury could have happened elsewhere.

4. Your claim involves criminal activity

If you are involved in any criminal activity at the time of the accident, such as impaired or reckless driving, your insurance provider can deny your claim. If you are caught with a suspended licence, your insurance company is not required to cover you, either.

If you receive any driving convictions, whether criminal or not, it is always important to disclose this information to your insurance provider. All convictions remain on your driving record for three years after you were convicted, and not telling your insurance provider could jeopardize your ability to receive coverage for your claims.

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Julia Stratton

Julia Stratton is a freelance writer living in Ottawa. When she’s not writing, you can find her curled up with a book, running, or cooking up adventurous new recipes in the kitchen.

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