What to Do When Your Car Insurance Claim Is Denied

Getting into a car accident is horrifying and being denied your insurance claim only adds to the dismay. Yet this is an all-too-common issue.

In this blog, we explore some of the most common reasons so you can prevent making mistakes and increase your chances of having your claim approved. If you’re unlucky enough to be denied despite taking precautions, there are ways to resolve the issue, like seeking legal advice.

5 Reasons Why Car Insurance Companies Can Deny a Claim

Most car insurance policies state that you need to report your accident within a stipulated timeframe. This is to ensure that there’s enough time to investigate your vehicle or that of the other driver. Failing to do so can result in your claim being denied. The same applies if you get your vehicle repaired prior to the insurance company’s investigation and without their permission.

According to the Financial Services Commission of Ontario (FSCO), there are certain exclusions in the Standard Auto Policy.

  1. Unlawful and Reckless Driving

Your insurance company reviews your policy and then decides whether your claims fall under it. Sometimes insurers will investigate to identify false or frivolous claims.

For this, your insurance provider will ask you to submit both medical records and police accident reports


The accident report is necessary for claiming car insurance. Along with this, your insurance agent, broker or company may also ask for supporting documents such as a death certificate for life insurance claims. If a police report states that you were guilty of driving recklessly, then your claim will definitely be denied. The law ensures that any driver who puts others’ safety at risk suffers the consequences.

  1. Non-Payment of Premium

Insurance is bought in the hope that you never have to use it, but accidents happen. Failing to pay on time can result in increased premiums, poor insurance and bad credit. This can lead to additional fees or cancellation of your contract. If you had a car accident and your insurance premium was overdue, then the insurance provider has the right to deny your claim, regardless of the reason why the payment was missed. To that end make sure your insurer always has your correct address and banking information on file to avoid missed payments.

  1. Non-Authorized Driver Behind the Wheel

As mentioned by the FSCO, your insurance company has the right to deny your claim if someone convicted of Criminal Code offenses was driving your vehicle. This includes:

  • Causing death or injury (with or without alcohol being involved)
  • Operating a vehicle dangerously
  • Failing to stop at the accident site
  • Driving with more than 80 mg of alcohol in their blood
  • Refusing a breath sample

For these reasons, it’s best to disclose to your insurance company the names of everyone above driving age in your family/household. If any of them has a poor driving history or little driving experience, then you must sign a waiver that states they won’t be allowed to drive your car.

  1. Shortage of Coverage

Providers put limits on insurance coverage so you will have to pay out of pocket any overage.

  1. Violation of Policy

Vehicles come with limits and exceptions. For instance, if you have an accident while driving off-road then your claim will be denied.

4 Smart Steps to Resolve the Issue

Your claim may be completely genuine and your insurance company have all the information it needs and your claim may still be denied. To further reduce that possibility, follow these practices for filing your claim:

  1. Report the Accident Immediately to the Insurer

Any delay in your car insurance claim will raise questions. To avoid this, take photos of all damages and submit them to your insurer as soon as possible. Many companies have a phone app or allow for online submission to quicken the process and make it easier.

  1. Seek Medical Attention

Always seek medical attention after an accident to confirm that your injuries are a result of the collision. Visit the doctor even for a minor collision as that information may support your claim later.

  1. File a Police Report

Police accident reports play a crucial role in insurance claims so make sure you file one. This also documents details concerning whether you were at fault and your driving ability.

  1. Seek an Attorney

Depending on the size of your claim, whether it’s for property damage or injuries, hiring a lawyer is a good way to move your claim along.

When you understand the reasons why your car insurance claim might be refused, you have the upper hand in preventing that from happening. If taking precautions doesn’t help and you’re truly not at fault, seek legal counsel. This will ensure that you receive fair compensation as quickly as possible.