July 28, 2011

What To Do When An Auto Insurance Company Denies Coverage

Two of the worst words that someone looking for car insurance can hear are "denied coverage". Being denied coverage can happen for a number of reasons, but to the client who is looking to have their car covered, why doesn't matter, only what to do about it once it has happened. Although being turned down by a car insurance company is less common now than it once was, it can still make a customer feel as though they have very little recourse in getting their car insured and being safe on the roads, but there are a number of things that can be done if an auto insurance company denies coverage.

The easiest thing to do is to move to another company. Often, this will solve the problem as many companies are looking for new clients to increase revenue. Companies are much more willing to take on even clients who do not have a perfect track record on the road as they have to compete with a far larger pool of interested businesses, and cannot afford to turn down clients simply because they have had an accident. Internet-based insurance companies are a good place to start, as they can often offer the same coverages and features as a local broker or company, but at a reduced price and with a great deal less effort on the part of the buyer.

There will be times, however, when going to another company will not be a possibility because of an event that has happened or a particular dealing with an insurance company. In these cases, a client would be wise to seek out their state's insurance commission and ask them for advice and, if necessary, arbitration concerning the decision. New insurance laws prevent companies from refusing coverage for a wide variety of reasons, and if the commission finds that a company is not abiding by the law, they have the power to demand a change. If the company refuses, the commission can bar them from selling insurance in the state. It is important to note that the commission is an unbiased entity, which means that it could also find in favor of the car insurance company, and its judgments are considered to be final. Seeking out a new company is the best choice in the case of denied coverage, and it is best to save the commission as a route of last resort.

Although few drivers are now refused coverage by insurance companies, it does happen, and it is important to know what options are available to find new coverage or to ensure that a current provider is not breaking the law with their denial.