How and Why Can Insurers Deny Your Claim?

Last Updated on December 27, 2025

You did everything you were supposed to do: you paid your premiums, you filed a claim, and you expected the insurer to pay. Then you get the letter (or email): claim denied.

A denial doesn’t always mean you’re out of options. Sometimes it’s a paperwork problem, a misunderstanding about coverage, or a dispute about fault or damages. Other times, the insurer is relying on policy language that truly excludes the loss. Below are the most common reasons insurers deny auto claims—and what to do if it happens to you.

Key Takeaways

Most auto claim denials come down to three issues: the loss isn’t covered, the policy wasn’t active, or the claim wasn’t reported/cooperated with promptly.
Always request a written denial letter that cites the exact policy language used to deny your claim.
Many denials can be reversed with better documentation—photos, estimates, police reports, and a clear timeline of events.
If you believe the denial is unfair, escalate: internal appeal, state insurance department complaint, and (for major losses) legal help.

Table Of Contents

Claim Denial vs. Claim Delay vs. Partial Denial
The 3 Most Common Reasons Auto Insurance Claims Get Denied
Other Common Reasons Insurers Deny Auto Claims
No-Fault States: A Common Source of “Denials” (Especially for Injury Claims)
What to Do if Your Insurance Claim Is Denied
How to Reduce the Odds of a Denial in the Future
FAQs on Insurance Claim Denials
Final Word on Claim Denials

Claim Denial vs. Claim Delay vs. Partial Denial

Before you panic, confirm what you received:

Delay: The insurer needs more information (photos, statements, repair estimate, police report, medical records) before deciding.
Partial denial: The insurer agrees to pay something, but not everything (for example: they’ll pay for repairs, but not OEM parts; or they’ll pay ACV, not replacement cost; or they deny certain medical treatments as unrelated).
Full denial: The insurer says the loss isn’t covered or the policy wasn’t in force, so they won’t pay anything under that coverage.

Either way, ask for the decision in writing with the specific policy language they relied on.

The 3 Most Common Reasons Auto Insurance Claims Get Denied

1) The Loss Isn’t Covered Because of Policy Exclusions or Missing Coverage

Many denials are simple: the policy doesn’t cover what happened. For example, liability doesn’t fix your own car, and collision doesn’t cover theft or hail. Coverage gaps often show up when people assume “full coverage” means “everything.” (It doesn’t.)

If you’re unsure what your policy covers, start with the basics: what an insurance claim is and which coverage part you filed under.

2) Your Policy Was Canceled, Lapsed, or Not Active on the Date of Loss

If the policy wasn’t in force when the accident happened, the claim may be denied—even if you reinstate coverage later. Lapses can happen due to missed payments, a failed renewal, or cancellation notices you didn’t see.

If this might apply, review: what happens when car insurance lapses and whether your insurer offered a grace period or reinstatement.

3) Late Reporting or Failure to Cooperate With the Investigation

Most policies require “prompt notice” and reasonable cooperation. If you wait too long to report an accident, fail to provide requested documents, or refuse a statement, the insurer may deny the claim—especially if the delay makes it harder to confirm what happened.

When in doubt, it’s usually safer to report incidents quickly. Here’s a practical guide on when you should report an accident to your insurer.

Other Common Reasons Insurers Deny Auto Claims

Beyond the “big three,” these issues commonly trigger denials or reduced payouts:

Excluded or unlisted driver: If the person driving is specifically excluded (or, in some cases, a regular household driver wasn’t disclosed), the insurer may deny coverage. Learn more about an excluded driver and why insurers care who has access to your vehicle.
Material misrepresentation: Big pricing details matter—garaging address, primary driver, annual mileage, vehicle use, rideshare/delivery use, prior losses, and license status. If the application information was inaccurate, the insurer may deny the claim or rescind coverage (rules vary by state).
Fraud concerns: If the insurer suspects the claim is staged, inflated, or inconsistent, they may deny it until you provide proof. If you’re dealing with a false accusation or a disputed incident, this may help: what to do if someone claims you hit their car when you didn’t.
Intentional damage or illegal activity: Policies commonly exclude intentional acts. Criminal activity can complicate a claim, too. For example, a DUI can create coverage disputes and may affect whether certain coverages apply. (At minimum, expect heavy scrutiny.) If you’re curious how insurers learn about DUI-related incidents, see: how insurance companies find out about a DUI.
Insufficient coverage limits: Sometimes the insurer isn’t denying the claim—they’re denying the amount above your limits. If your liability limits are low, you can be left paying the difference. This guide explains how to choose limits: how much insurance you need.
Wrong coverage type filed: Example: you file under uninsured motorist, but the other driver actually has insurance—so that portion can be denied. If you’re not sure what UM/UIM does, start here: uninsured motorist coverage explained.
Medical documentation issues: For injury-related claims, insurers may dispute whether treatment was necessary or related to the crash—especially with delays in care or gaps in records.
Wear and tear / mechanical breakdown: Auto insurance generally isn’t a maintenance plan. If damage looks like gradual deterioration, the insurer may deny it as non-accidental.

No-Fault States: A Common Source of “Denials” (Especially for Injury Claims)

In no-fault systems, your own policy’s Personal Injury Protection (PIP) typically pays for medical expenses and certain losses regardless of who caused the crash. That means your attempt to file a traditional bodily injury claim against the at-fault driver may be restricted until you meet your state’s lawsuit threshold.

Insurance rules vary widely, but the states commonly associated with no-fault auto insurance include Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah. Puerto Rico also has a no-fault requirement. For a deeper explanation, see: how no-fault auto insurance works.

What to Do if Your Insurance Claim Is Denied

If your claim is denied, use this checklist before you give up:

Step 1: Get the Denial in Writing

Ask for a written denial letter that includes the exact reason, the coverage part involved, and the specific policy language they relied on.

Step 2: Compare the Denial to Your Declarations Page and Policy

Confirm that the vehicle and drivers are listed correctly, the policy was active on the date of loss, and the coverage you’re claiming (collision, comprehensive, UM/UIM, PIP, MedPay, rental, etc.) is actually on the policy.

Step 3: Fix What’s Fixable With Documentation

If the denial is based on “lack of proof,” provide the missing items: photos, dashcam footage, witness info, repair estimates, medical records, police report number, towing invoices, and a clear written timeline of events.

Step 4: Use the Insurer’s Appeal or Reconsideration Process

Many insurers will reopen a claim if you submit new evidence or point out errors. Keep communications polite, factual, and in writing.

Step 5: Escalate to Your State Insurance Department

If you believe the insurer is misapplying your policy or ignoring evidence, you can file a complaint with your state insurance department. A good starting point is the NAIC’s Insurance Departments directory: https://content.naic.org/state-insurance-departments.

Step 6: Consider Professional Help for High-Dollar or Complex Claims

For large losses, serious injuries, or potential bad-faith handling, it can be worth speaking with an attorney. In some situations, you may even be able to sue your insurance company—but rules, deadlines, and required proof vary by state.

How to Reduce the Odds of a Denial in the Future

Report accidents promptly and keep your own photos/video and notes.
Pay premiums on time and confirm renewals (especially after moving or changing billing info).
List all regular drivers in the household and update your policy when circumstances change.
Match coverage to risk: collision/comprehensive for vehicle damage, higher liability limits for injury/property risk, and UM/UIM where it makes sense.
Be accurate on applications (garaging address, mileage, usage, drivers). Small “fudges” can become big problems during a claim.

FAQs on Insurance Claim Denials

Can an Insurance Company Deny a Claim for Late Reporting?

Yes. Most policies require prompt notice. If a delay makes it harder to investigate what happened, an insurer may deny the claim or reduce what it will pay. Always report accidents as soon as practical and keep your own documentation.

What Should a Claim Denial Letter Include?

At minimum, it should state the reason for denial, the coverage part involved (collision, comprehensive, liability, UM/UIM, PIP, etc.), and the policy language the insurer relied on. If the explanation is vague, request a clearer written decision.

Can My Claim Be Denied if Someone Else Was Driving My Car?

It can be. If the driver is excluded on your policy, not listed when they should be, or doesn’t meet the policy’s permission/household rules, the insurer may deny coverage. Listing all regular drivers and avoiding excluded-driver situations helps prevent surprises.

Is a Claim Denial Final, or Can I Appeal It?

Many denials can be appealed. Ask what evidence the insurer needs, submit documents promptly, and request reconsideration in writing. If the insurer is ignoring evidence or misapplying your policy, you can also file a complaint with your state insurance department.

Can an Insurer Deny a Claim Because They Suspect Fraud?

Yes. If the insurer believes a claim is staged, inflated, or inconsistent, they may deny it or pause payment until you provide additional proof. Strong documentation—photos, reports, receipts, and a clear timeline—can help resolve disputes.

Why Would an Insurer Pay Part of a Claim but Deny the Rest?

That’s a partial denial. Common examples include denying certain medical treatment as unrelated, applying depreciation, refusing certain parts or labor rates, limiting coverage to policy caps, or denying items not covered under that section of the policy.

When Should I Contact My State Insurance Department or an Attorney?

If you have a high-dollar loss, serious injuries, or you believe the insurer is acting in bad faith (ignoring evidence, delaying without cause, or misquoting policy language), escalation may be worth it. Start with the insurer’s appeal process, then consider your state insurance department and legal advice if needed.

Final Word on Claim Denials

Insurers deny claims for a handful of repeat reasons: the loss isn’t covered, the policy wasn’t active, or the claim wasn’t reported/investigated properly. The fastest path forward is to get the denial in writing, verify the coverage facts, and submit clear documentation. If the denial still doesn’t make sense, escalate through the insurer, your state insurance department, and professional help when the dollars justify it.