We take out insurance for many reasons in our lives. We want to protect ourselves against various problems, disasters, and unknowable outcomes. When these occurrences do eventually happen, we expect our insurance to step in and do the job we've paid for them to do.
When an insurance claim gets denied, it can be surprising and infuriating. Even worse, it can mean you might be in a very difficult financial position. If you've been denied insurance, you might need to take legal action to rectify the situation.
What are your options when you've found yourself in this kind of situation? Read on and we'll walk you through what you need to know.
Understanding Claim Denials
What might an insurance company deny your claim? First, it's important to understand the distinction between insurance denials and insurance rejections.
Denial is when an insurance company does not approve payment for a specific kind of claim. On the other hand, a rejection is when an insurance company does not approve a claim due to some sort of improper filing. Generally speaking, a rejected claim could be re-submitted with errors rectified and be accepted by the company.
For a denied claim, there could be a variety of reasons that an insurance company makes this decision. They will vary depending on the type of insurance being discussed.
When it comes to health insurance, for example, an insurance company might argue that the injuries or care being requested are a result of a previous accident or injury.
They might put the blame on pre-existing conditions you had prior to signing up for their policy. They might also put the blame on the amount of time it took you to seek medical help and may claim your waiting time worsened your condition.
All types of insurance can run into these types of problems. Even with life insurance, there are scenarios where an insurance company might try to dispute the need for a proper payout.
The type of death that occurred might not be covered under their policy, or they might. claim that you did not disclose enough personal information for the policy to be priced and applied correctly.
Whatever the reason might be, if a claim is denied you'll be in a sticky situation. You'll need to take immediate action if you hope to get the compensation that you need and were counting on.
Appealing an Insurance Claim Denial
If an insurance company denies your claim, they have a requirement to let you know this information and provide details as to why your claim was denied. They also should provide you with information as to how you would go about appealing the decision and disputing their call.
You have a right to appeal an insurance denial, but there's more than one way to go about the process. You could consider an internal appeal or an external review.
An internal appeal would be working through the insurance company directly. This is where you would request the insurance company make a full and fair review of its initial decision. With different eyes on your case, a different outcome might result.
If getting payment through your insurance is an urgent matter, your insurance company must also speed up this process in order to get you a quick answer. The odds of getting a different outcome through this method will depend on the reasons the company gave for denying your claim.
You'll want to issue an appeal letter to the insurance company that outlines the reasons why you think their final decision is an incorrect one. An attorney can help you to draft this letter properly and best state your argument against the denied claim.
External review, on the other hand, would be when you take your case to an independent third party. If you take this approach, the insurance company will no longer get to have the final say in whether they issue your claim or not.
While this may sound appealing, it will also come at a cost.
Filing for External Review
The final determination letter from your insurance company should also include information on how you can file for an external review. It should also stipulate how quickly you must act if hope to take this action. Often, you'll have only a sixty-day window.
In some cases, you might only be able to file for external review if you've already gone through the initial internal appeal process. It will depend on the details of the case, the company, and the reasons for the denial.
It's important to look carefully at the information provided by the company, as the process will vary state to state and company to company.
You won't always have to complete the process of submitting for external review on your own either. In most cases, you can have an authorized representative handle this for you. This person could be a friend, family member, or an attorney.
There are few insurance companies that won't allow this, but most will.
The external review process overall can happen very quickly. Once underway, it will likely only take one to two months for the third party to come up with their own decision. Once this decision is reached, it is final, and both the insurance company and yourself must abide by it.
What To Do When Denied Insurance
Getting a denied insurance claim sent back to you can be a terrible feeling. Many people are unaware of the steps they need to take following this occurrence. The above information can help.
Need more legal advice and insurance information? Keep scrolling our blog for more. Visit the Insurance section to learn more about how to deal with denied insurance or claim settlements.
