Car insurance claim denied? Here’s how to file an appeal in the Philippines

Car insurance is like a safety shield that protects policyholders financially in the event of accidents, theft, and natural disasters. All this protection is offered to you in exchange for a premium that you pay to the insurance provider. If you are wondering how it all works, it is actually quite simple - you purchase a policy, pay the cost, and claim the coverage when required.

However, things do not always go as planned; sometimes insurance companies deny claims - putting all the burden on the policyholder’s shoulders. In such a situation, you can file an appeal and hope things work out as expected.

In this article, we’ll discuss the process of claim denial and filing an appeal. So, let’s get started…

Car insurance claim: A formal instruction

What is a car insurance claim? A car insurance claim is a formal request that a policyholder submits to their insurance provider, seeking compensation for the repair services stated in the policy. Specifically, in the Philippines, car insurance claims are mainly processed through authorised repair shops or directly reimbursed to the car owner.

What happens when a car insurance claim is denied? Unfortunately, not all claims are approved due to specific reasons (listed below). And when this happens, the policyholder comes under a lot of stress, especially if they rely on the coverage for expensive repairs.

How to avoid claim denial? It is pretty simple. It can be done by clearly understanding your policy and the workings of the claim process.

Most common car insurance claims

There are a few common insurance claims that are filed mainly by clients. Furthermore, it is a good idea to be familiar with different types of claims that can be filed, as it prepares you better and helps you identify the specific preparation required. The list includes -

Third-Party Liability: This is a mandatory coverage required of all motor vehicle owners. It pays for third-party bodily injuries or death.

Accident or collision damage: This is one of the most common claims filed by car owners in the Philippines, indicating the high frequency of accidents. It was caused by an accident.

Acts of God: Another popular claim in the country covers damages due to floods, earthquakes, landslides, and typhoons.

Theft or carjacking: This category covers the loss of a vehicle or its parts that have been stolen.

Know your policy in detail

Do you know that most claims get denied because policyholders don’t fully understand their policy and the coverage it offers? Here’s how you can understand your policy better -

• Read the fine print, see what is and isn’t covered.
• Know your policy schedule, including the expiry date, and schedule the renewal accordingly.
• Understand the deductibles.
• Know the circumstances that your insurer does not cover, like driving without a license, driving under the influence, and using personal vehicles for commercial purposes.

Also Read: Filing car insurance claims in the Philippines: Coverage to consider in case of an accident

Most common reasons for claim denial

Did you know that your insurer can reject a claim even if it’s legitimate? That rule certainly happens when specific rules aren’t followed. Below are listed some of the most common reasons -

• Late filing of the claim. It is recommended that you file the claim within 7 to 15 days of the incident.
• Inactive insurance policy. If you fail to pay the premium or renew the policy on time, you’ll no longer be covered under the policy.
• Incomplete documentation, such as missing police reports, photos of the incident, or repair estimates, can lead to denial of a claim.
• Misrepresentation of information or facts about the incident or personal & vehicle details.
• Policy exclusions, such as reckless driving and illegal acts, are not covered.

Common examples of when providers deny claims -

Example 1: The Insurance provider denied the claim because the owner used his ‘personal car’ as a Grab car.

Example 2: The claim was denied because the owner failed to submit proper photos and a police report of the car accident

Example 3: The policy didn’t include Acts of God coverage, so the claim was denied for a car involved in floods

Claim denied? Immediate steps to take

So, your insurance claim got denied? Don’t worry, because there’s a way out. One of which is the right to appeal to your provider. It all starts with thoroughly reviewing your policy and the denial letter. Usually, the letter from the provider states a clause from the policy that is responsible for the denial. Your job is to verify if the stated reason is justified or not.

Also Read: How to claim CTPL Insurance? Here’s what you need to know

Guide to file an appeal

Step 1: Review the claim denial reason; read the explanation by the insurer carefully, and try to identify the policy clause cited.

Step 2: Prepare an appeal letter if you believe the denial is unjust and send it to the provider. Try explaining your side of the story and attach all the supporting documents.

Step 3: Submit the letter to the insurer. Before doing so, keep a copy of this letter and all other communications.

Step 4: Be patient, most insurance providers take 15 to 30 days to respond.

Step 5: Escalate the matter to the Insurance Commission if your appeal is denied or the insurer refuses to reconsider.

List of supporting evidence required

• Police report
• Photos or video of the damage and accident scene
• Repair estimates
• Correspondence with the provider

Claim denied? When to escalate the matter to the IC

If your provider fails to consider your appeal, don’t get disheartened, as there’s a way out: appealing to the Insurance Commission. You can submit a formal complaint with the IC either through their website or in person at their office in Manila. However, make sure to accompany the complaint with your policy, denial letter, communications with the provider, and other supporting documents.

Also Read: New to driving? Here’s how to handle accidents and insurance

Tips to prevent future claim denials

There are two key things to learn: firstly, filing a claim properly, and secondly, maintaining good terms with the insurer.

Best practices to file claims -

• Submit all the required documents on time.
• Report the incident to the provider and local authorities as soon as possible.
• Update your policy on time, renew it before expiry.
• Take multiple photos of the damage and the accident scene, and submit them along with the claim form.

How to maintain good terms with the insurer -

• Make premium payments on time
• Inform the insurer when modifying the vehicle
• Be truthful and maintain open communication

Answering common issues related to claim denial 

Q1.What are the possible reasons for the denial of an insurance claim?
Ans. Some of the most common reasons include late filing, incomplete documentation, and policy exclusions.

Q2. What to do if the provider denies my appeal?
Ans. In case writing to the insurer doesn’t help, you can escalate the case to the Insurance Commission.

Q3. How long does it take to process a claim rejection appeal?
Ans. Usually, it takes between 15 and 30 days to process the claim, depending on the case's complexity.

Q4. What documents are required to file a claim?
Ans. Usually, you require the following documents to file a claim: original policy, driver’s license, repair estimates, vehicle OR/CR, photos of the damage, and police report.

Q5. Can I file a new claim for the same incident after the former one was denied?
Ans. No, once your claim is denied and finalised, you can file an appeal with the provider or a complaint with the IC.

Q6. My policy expired. Can I still file a claim?
Ans. Claims filed after the policy's expiry date are automatically denied.

Q7. When should I report the accident to my insurance company?
Ans. It is advisable to report the incident to the insurer within 24 hours.

Q8. Should I hire a lawyer to appeal my claim?
Ans. You are recommended to hire a lawyer if the claim is high in value or complex.

Q9. Is there a time limit to file an appeal?
Ans. You are recommended to file an appeal within 30 days of receiving the denial notice from the provider.

Also Read: 6 Smart ways to never forget your car insurance expiry date

Bottom line

Car insurance is a must, as it alleviates the financial liability from the car owner's shoulders in the event of an accident, collision, fire, flood, or any other unforeseen incident. However, that does not mean you are always protected, as there is a chance the provider may deny your claim. This is a very stressful situation for a policyholder; however, understanding your rights and the correct way to appeal can make all the difference, i.e., from being financially burdened to enjoying the perks of insurance.

It is advisable to read your policy thoroughly, understand the inclusions & exclusions, and file the claim asap with all the required documents. In case your insurer fails to act in good faith and denies your claim, don’t hesitate to appeal or reach out to the Insurance Commission.

Also Read: Car insurance add-ons in the Philippines: Which ones are worth it?