What to do if your insurer won't pay

Before you worry that you have no options available to you, we want to go through some of the key reasons why they might not pay out, and discuss some of your choices.

Reasons why an insurance provider may not pay

There are a number of reasons why an insurance provider will exclude cover for an accident. It is helpful to be aware of situation in which you may be denied payment. Insurance comparison platform Finder.com.au has detailed some of the most common exclusion situations in which an insurer may refuse to pay a claim:

• You were under the influence of alcohol or drugs. These will immediately void your coverage.
• Your car is not roadworthy. If your brakes, tyres, or lights are worn out and/or broken you may not be able to claim against your insurance.
• Your car has been modified without informing your insurer, which means that the vehicle you have now is not the same vehicle your insurer agreed to cover.
• The person driving your vehicle is a restricted driver and you do not have cover for them to drive your car. A common example is when a car is being driven by someone under 25 and the policy does not cover young drivers.
• The registration on your car is unpaid, or you do not have a driver's licence.
• You were carrying a load which was not properly secured.
• There were more people in your car than your car was designed to carry.
• Your car was repossessed or legally confiscated.
• You were driving recklessly, or were using your car for racing.
• Your car was being hired out for money.
• You did not pay your insurance premium.

Sheen Panel Service is dedicated to helping you get on with life after an accident. We have many resources about the process of claiming for car insurance, and why insurance agencies may not pay your claim.

Main reasons for refusal

As mentioned above there are a number of situations in which an insurance provider will not pay - and these are grouped into four main categories:

• Non-disclosure of information, such as unauthorised modifications.
• Exclusions, such as driving intoxicated.
• Fraud, such as setting a vehicle on fire and trying to claim the policy payment.
• Cancellation, whereby you are not up to date on your premium payments.

What should you do if your insurer refuses to pay your claim?

If car insurance won't pay your claim, you still have options. It is likely that your insurer will provide you with a letter stating their reasons for denying your claim.

Non-disclosure

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If your claim has been denied for non-disclosure, you can:

• Write to your insurer and ask them to specify what you did not disclose. You may wish to argue that you did disclose certain information, or that it was reasonable that you did not disclose certain information.
• Ask for a copy of the underwriting guidelines to confirm whether they would have provided you with cover if you had provided the relevant information.
• File a complaint with Australian Financial Complaints Authority (AFCA) — but make sure you are aware of any time limitations.

Exclusions

If your claim has been denied for a breach of an exclusion, your employer is obliged to show that the relevant exclusion applies (for example, that the driver's date of birth makes them under 25 years of age). They also have to show a connection between the exclusions and the damage.

For example, your car tyres may make your car unroadworthy, but if  you were hit from behind, your tyres did not cause the accident and your insurer must pay.

Fraud

This is a serious allegation and the insurance provider needs to prove that you acted in a certain way to meet the criteria for fraud. In serious cases, fraud can be referred to the police. If you are being investigated for fraud it is recommended that you seek legal advice immediately.

Cancellation

If you have not paid your policy, then you are no longer covered by the insurance provider and they are not obliged to cover your claim. It is difficult to do more in this instance but you should get advice about whether your insurer had sufficient reasons to cancel your policy.

You can dispute their decision by making a complaint to AFCA.

Contact Sheen

If you've been in an incident on the road, Sheen can help. As well as panel beating and towing, we can work with your insurer to reach the right outcome for you.

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