Four Steps To Appeal a Rejected Insurance Claim
“This is a very important read given the current state of claims over the last 2 years and the inexperienced claims staff we sometime encounter during the claims process.
I feel now more than ever we are receiving partial declines, declines and disputes more regularly. A lot of the disputes are purely misinterpretations of the wording and factual issues we can normally fix with relative ease using the experience we have as brokers.
If the claim is not a simple fix, I would follow these steps below, keeping in mind that once the claim goes to IDR there are no further negotiations we can have with the insurer or Steadfast Triage to resolve the issue. IDR should be your last step once you are sure the insurer is unwilling to work with you”. – Darren Free (Claims Manager at Ausure)
If you have had an insurance claim rejected, here are some steps you can take to appeal the decision
1. Broker Advocacy
We are a valuable resource for policyholders who have had their claims rejected. We can provide advice and guidance on the claims process and help policyholders understand their options for challenging the rejection. In some cases, the rejection may be based on a factual issue, such as conflicting evidence or incomplete documentation. In these situations, brokers may be able to help policyholders gather additional evidence or documentation to support their claim. For example, the broker may recommend hiring an independent expert to provide a second opinion or a new report that contradicts the insurer’s findings. If the rejection is based on an exclusion in the policy, brokers can reach out to technical experts, such as lawyers or insurance assessors, for their opinion on whether the policyholder has grounds for arguing the exclusion. These experts can provide a more objective and informed perspective on the policy language and can help the broker and policyholder determine the best course of action. Overall, broker advocacy can help policyholders navigate the claims process and increase their chances of having their claim accepted. It is important for policyholders to work closely with their brokers throughout the claims process and seek their advice and expertise when needed.
2. Internal dispute resolution
If your broker can’t get the insurer to overturn the decision, the next step is requesting your insurer launch a formal internal dispute resolution process. The internal review structure varies between insurers, but all are legally required to review the decision within 45 days. In some instances they may choose to overturn their original decision based on a fresh look at the claim.
3. External Dispute Resolution
The Australian Financial Complaints Authority (AFCA) handles disputes over rejected insurance claims from November 1, 2018, onwards. Prior to this date, complaints should be lodged with the Financial Ombudsman Service Australia (FOS). However, it’s important to note that these bodies only have jurisdiction over certain insurance products and require specific criteria to be met. The scope of FOS and AFCA may include claims related to home and contents insurance, motor vehicle insurance, travel insurance, personal accident and illness insurance, and small business insurance. It’s best to check with the relevant body to determine if your claim falls under their jurisdiction.
4. Court Proceedings
If your insurance claim does not fall under the jurisdiction of FOS or AFCA, the final option for recourse is to initiate legal proceedings in court. The decision to pursue legal action should be made after careful consideration of the costs and potential outcomes of such action. In addition to court proceedings, some states in Australia may have a Fair Trading Tribunal, which can be another avenue for resolving disputes with insurers.
No Claim Without Cover
If you don’t have an insurance policy covering the specific incident or event for which you’re making a claim, you won’t be able to make a successful claim. In other words, insurance is a contract between the policyholder and the insurer, and it only covers the risks and events that are specifically listed in the policy. If the policy doesn’t cover a certain event or incident, then the insurer is not obligated to pay out on a claim related to that event. So it’s important to carefully read and understand your insurance policy, and make sure it covers the risks and events that are relevant to your situation. This is where the importance of having a trusted insurance brokers comes in. Insurance brokers can provide a full review of your insurance needs, ensuring there are no possible exposures.
Information originally sourced from Steadfast Well Covered https://www.steadfast.com.au/well-covered/insurance-for-growing-business/four-steps-to-appeal-a-rejected-insurance-clai
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