When you purchase insurance, the first form you will see is an application for insurance. If you aren’t careful, your application could be denied.
When a claims adjuster receives your claim, he will ask the Underwriting Department for a copy of it. Why? Because he will verify all information on your application as part of his investigation. Many times, adjusters discover incorrect information that allows the insurance company deny the claim or even cancel the policy.
Let me show you some examples of denial which actually occurred:
Example 1. Example 1. A man purchased car insurance in 2002. Their application was approved in 2002. The only drivers at the time were his wife and him. They had a 10-year-old daughter. They were involved in an auto accident in 2008. Now 16, the daughter does not drive but is 16 years old. After an investigation by the adjuster, the insured company sent them a letter denying their claim. According to the letter, the insured failed to identify a potential driver within the household. The insurance company denied a claim despite the fact that they had disclosed the names and ages of their daughters in 2002 and that the policy had been renewed six times.
Exemple 2. Example #2. A married man applies for car insurance even though he is not divorced. The application will ask about marital status. The man ticks the box that says “married.” He lists his wife and himself as the drivers. He is involved in an accident that caused his car to be totaled. His car is totaled and he is being sued by negligence. He also has $5,000 in medical bills. An investigation reveals that he was divorced at the time of his application being accepted. The insurance company sent him a $525 check, which is his returned Premium. They denied the claim and stated that they would not have offered the “marriage Discount” to the policyholder if they had known that he was divorced.
How can you avoid application errors? Here are six ways to protect yourself from application errors.
1. Complete the application. Don’t leave any lines or boxes blank
2. You should not sign the application before all information has been received.
3. Don’t sign any application. Let the agent complete it after your departure.
4. After you have signed the application, the agent will give you a copy.
5. After you have received your policy, review the information in your application and the policy terms.
6. Notify your agent immediately of any changes to your policy, such as added drivers or deleted cars.
These six steps will ensure that your insurance company will not have any problems when you file a claim.
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