Insurance denial is a blanket term that is used when insurance companies deny insurance coverage to applicants, or simply deny the claims that have been made by their policy holders. Broadly speaking, we can divide denials in two parts, namely, denial of coverage and denial of policy, or denial of one particular element of claim.
Legally speaking, these denials are fully justified in the court of law, if the insurance company is able to amass sufficient evidence and logical denial causes, and in such cases, fighting insurance denial, is almost impossible.
Policy and Coverage Refusal
The concept of insurance works on the basis of policy generation. The policy is basically a legally binding agreement or rather a contract, wherein, people apply for policies in order to get coverage against financial risks.
Health insurance is a type of insurance policies where the people apply for coverage against health related expenditures. Hence, during the time period of the policy, if people end up with any genuine health related expenditures, the insurance company is obliged to pay off such expenditures.
In some cases, the company might deny selling a policy to an applicant for certain legitimate reasons. Such a scenario is also often referred to as the insurance denial. In most of the insurance denials, the company itself informs the applicant about that reasons of denial.
In many cases, the denial is also accompanied by an alternative policy. For example, people with life-threatening ailments often face life insurance denial. In such a case, the company often suggests some alternative policies that cover their medical expenses.
Denial of Insurance for Companies and Businesses
Many business organizations face denials when they apply for liability insurance and business risk insurance. Insurance companies reject these applications on the sheer logic that business risks are inevitable. There are some clever alternatives like coverage of all risks that stand outside the business or insurance against only consumer-created liability.
The advantage of such alternative and tailored policies is that they are effective against liabilities that have been created by phenomenon that lie outside the business. For example: a person suing the organization for injuries, that he suffered from when he was inside the premises of the business.
Insurance Claim Denial
The second type of insurance denial is the denial of insurance claim. During the time period of the existence of the insurance policy, the holder or owner of the policy can claim compensatory amounts from the company. In some cases, this claim is denied. Shocking as it may seem, this denial is legitimate and legally permitted.
There are two reasons, why these claims can be denied. Firstly, if the policy holder claims something that is not included in terms of the insurance policy, and secondly, if the policy premium has not been paid.
This may happen when a person claims compensation for a pre-existent and uncovered hypertension medications under mediclaim, then the company can rightfully deny it. Denial of health insurance claims is especially hard to cope with.
Denial of insurance, in most cases, are legitimate. But to be frank, such situations are rare. However, in case of wrongful refusal of insurance, people can file a suit against the company with the help of an insurance denial lawyer.