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100 Most Influential Lawyers in America
– the National Law Journal

What are the most common reasons for a car insurance denial?

On Behalf of | May 25, 2022 | Insurance & HMO Claim Denials

When one is involved in a car accident, car insurance provides the peace of mind to know that everything will likely work out. After all, car accidents are what car insurance are for, so when they happen, they pay, right? Unfortunately, not always. There are a variety of reasons that one may have their California car accident claim denied.

Automotive misuse

Using a vehicle for something the vehicle is not intended to be used for can be a basis for a denial. This can be using it for work or business purposes. It could be racing, stunt driving or even being used for car enthusiast events.

Illegal activities can void coverage too, as can using the vehicle as a dwelling. Before using the vehicle for anything other than normal, nonbusiness driving, call the insurance company to see what is covered.

Acts of God and man-made catastrophes

As many have learned over the past few years as flooding has increased throughout California and the rest of the country, some auto insurance policies do not cover flood damage if it is classified as an Act of God. They also do not always cover other Acts of God, like hurricanes, tsunamis, earthquakes, tornadoes, etc.

Some insurance policies also do not cover man-made catastrophes, like wars, a nuclear meltdown, etc. However, for those concerned about these types of coverages, most insurance companies are happy to provide additional coverage, for a fee, of course.

Normal wear and tear and mechanical breakdowns

There is a difference between a warrant and insurance. A vehicle warranty will cover mechanical breakdowns and, perhaps, even normal wear and tear breakdowns. Car insurance, on the other hand, will not. As such, if one’s engine explodes due to a mechanical breakdown, the car insurance company would likely not cover the costs of repairing the engine.

On the other hand, if something impacts that engine that causes it to explode, the car insurance company would cover it. The key is whether the breakdown is caused by an internal or external factor. For electric vehicle owners, this distinction can be important, especially with the rash of vehicle fires over the past decade.

Insurance denials

Sometimes, even if insurance covers it, it is not enough, which is when gap insurance becomes important. However, even when one does not have gap insurance or if there is an outright denial, that is not the end of the conversation. Contacting a local attorney or complaining to the state insurance regulatory board can offer some help.