When Claims Get Denied

Claims do get denied. It's an unfortunate part of any type of insurance transaction. Insurance regulators generally prohibit any travel insurer from paying any claim that is not 100% justified by the plan wording and the insurers absolutely don't want to cross those regulators. The reason is that the travel insurance company -- let's call it ABC Travel Protection -- is playing with someone else's money. The separate company that puts up all the money to pay the claim is the underwriter and the regulators make sure that ABC Travel Protection isn't paying fraudulent or unjustified claims with the underwriter's funds. So if the claims person can't find something in the policy wording to justify paying the claim it's not going to happen.

The flip side of this is that the various state regulators' primary responsibility is to make sure that their residents are treated fairly and they can bring some serious punishments down on ABC Travel Protection -- including banning them from selling policies to that state's residents -- if they're not being diligent in paying the claims that are justified. The result is that if your claim didn't get approved you can be pretty sure nothing nefarious is going on. No insurer wants to get hauled before your state's insurance regulators over your claim.

That being said, any time there's humans in the mix mistakes are bound to happen. Sometimes the mistake was made by the clams person, sometimes it was made by you. Hopefully the information on this site will help you minimize the chances that you've made the mistake. But it will be up to you, if you feel that the insurer has made an error, to get it corrected.

Before your claim is submitted you have responsibilities. Your responsibilities include:

  1. Making sure the claim forms are filled out legibly and completely.
  2. Making sure that all of the needed documentation is submitted
  3. Making sure that you comply with any time limits on filing your claim
  4. Making sure you understand what's covered and what isn't

If you need to see a doctor during your trip and then submit your claim without some sort of receipt/invoice from the doctor your claim won't be paid. They're not going to waive the requirement for the documentation and they're not going to try to chase down the doctor to get it.

Perhaps you needed to cut your trip short and return sooner than planned because your kennel called and says your dog (that's like a child to you) is severely ill. You can certainly file a claim for the trip interruption but it's really your responsibility to know that won't be covered.

Step #1 when disputing a claims decision is to find out exactly why the claim was denied. Often the letter you receive won't be specific enough to figure out what your next step should be. Call the person who issued the letter and find out exactly why they're not going to pay the claim. Maybe some additional information or a clarification of the circumstances will solve the problem. Maybe you filed a trip delay form when what you should have done is file under the trip interruption benefit. No help? Talk to a supervisor and ask to have another claims person review the case.

But if you've done everything by the book and still disagree with the decision you have rights. Included with the letter of denial there should be something spelling out what those rights are. Usually it will detail the procedure to proceed with arbitration. Here's an example from one insurer:

ARBITRATION. Notwithstanding anything in the Policy to the contrary, if the Company and Insured mutually agree at the time of a Loss, a claim arising out of or relating to the Policy, or its breach, may be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial rules except to the extent provided otherwise in this clause. Judgment upon the award rendered in such arbitration may be entered in any court having jurisdiction thereof. All fees and expenses of the arbitration shall be borne by the parties equally. However, each party will bear the expense of its own counsel, experts, witnesses, and preparation and presentation of proofs. The arbitrators are precluded from awarding punitive, treble or exemplary damages, however so denominated. If more than one Insured is involved in the same dispute arising out of the same Policy and relating to the same Loss or claim, all such Insureds will constitute and act as one party for the purposes of the arbitration. Nothing in this clause will be construed to impair the rights of the Insureds to assert several, rather than joint, claims or defenses.

 You'll notice that the arbitration procedure is voluntary and you'll also notice that there are some costs involved. You don't have to do this if you don't want to. Perhaps the first response for many that have a claim denied it to round up a lawyer -- again an added expense if you lose.

Your state's Department Of Insurance has many functions, including making sure that your state's residents are treated fairly and that disputes with an insurer are reviewed and followed up on. But they can't perform miracles. Here's a very thorough explanation from the New Hampshire Department of Insurance that sums up what you can expect from them (other states will be similar):

Please take a few moments to read the following information. We hope this will help you understand how the New Hampshire Insurance Department can assist with consumer complaints.

What We Can Do:

Our job is to enforce the law. We act as intermediary to help resolve problems between consumers and department licensees: your insurer. We attempt to assist with:

  • Satisfactory reconciliation
  • Factual resolution
  • If possible and available: compromise disputes

However, neither consumers nor department licensees are required to accept any attempted resolution arrived at through our efforts to mediate the dispute.

After initial review by us, if it is determined that jurisdiction applies; we forward each complaint to a representative of the company for review. These are generally forwarded to your insurer within ten days.

By law, companies must respond to consumer complaints. Companies may take up to 4 or 5 weeks to respond to a complaint. This timeframe is dependent upon the complexity of the complaint. However, we receive initial responses to most complaints within 10 business days.

What We Cannot Do:

  • We cannot order refunds, cancellation of contracts, damage awards, or other legal remedies because we do not have that authority under New Hampshire law. If you are seeking this type of relief, you may wish to consult with an attorney.
  • We cannot overturn or overrule a court order.
  • We cannot intervene in a dispute that is in litigation, formal mediation or arbitration.
  • We cannot give legal advice, interpret the terms of contracts, or other legal documents or act as your attorney
  • We cannot require a company to comply with a requested remedy if New Hampshire law does not give the department specific authority to do so.
  • We cannot promise that the specific remedy you request will be available.

So if you have had your claim denied and all of your protestations to the insurer have failed, your options will generally come down to these:

1) Enter into arbitration (additional cost to you if you lose)
2) Hire a lawyer and begin legal action (additional cost to you if you lose)
3) File a complaint with your state department of insurance (no additional cost to you, win or lose)

Can the department of insurance order that your claim be paid? In many cases, no. But if they agree that you have a valid claim the insurer will be in a tough position. If you now decide to pursue legal action you'll be walking into court armed with a finding from the department of insurance that in their professional and regulatory opinion that your claim is valid. That's a tough hurdle to overcome and in many cases, rather than spending the money to fight your case, they'll pay the claim.

Here's a list of web pages for information on starting the process. We suggest that you do not take this step until you have made every effort to resolve the dispute directly with the insurer and you should keep detailed records of every contact with the insurer. And don't bring in a lot of other issues such as "the claims person was rude" or "my travel agent told me such and such." All you are interested in is if the claim denial was a correct decision. Everything else is a distraction that they can't help you with.

The downside of this is if the department of insurance agrees that the insurer was correct in denying your claim. If that happens and you still choose to seek legal help you can be sure that the insurer received written notification of that decision and will present it to the judge/jury.

Alabama   https://aldoi.gov/Consumers/FileComplaint.aspx
Alaska     http://www.dced.state.ak.us/ins/Insurance/filingAComplaint.html
Arizona   http://www.id.state.az.us/consumerassistance.html
Arkansas   http://www.insurance.arkansas.gov/Administration/file_a_complaint.html
California   http://www.insurance.ca.gov/contact-us/0200-file-complaint/
Colorado   http://www.dora.state.co.us/insurance/contact.htm
Connecticut  http://www.ct.gov/cid/cwp/view.asp?q=254352
Delaware   http://www.delawareinsurance.gov/departments/consumer/consumerhp.shtml
Florida   https://apps.fldfs.com/eService/Default.aspx
Georgia   http://www.gainsurance.org/consumerservice/Complaint.aspx
Hawaii   http://hawaii.gov/dcca/ins/consumer/filing_a_complaint/how-to-file-a-complaint-against-all-other-insurers
Idaho   http://www.doi.idaho.gov/consumer/complain.aspx
Illinois   http://insurance.illinois.gov/Complaints/file_complaint.asp
Indiana   http://www.in.gov/idoi/2552.htm
Iowa   http://www.iid.state.ia.us/file_a_complaint
Kansas   http://www.ksinsurance.org/consumers/complaint.htm
Kentucky   http://insurance.ky.gov/online_complaint.aspx?MenuID=3&Div_id=4
Louisiana  https://www.ldi.state.la.us/ConsumerComplaintForm/Complaints/Welcome.aspx
Maine   http://www.maine.gov/pfr/insurance/complaint.htm
Maryland   http://www.mdinsurance.state.md.us/sa/consumer/file-a-complaint.html
Massachusetts   http://www.mass.gov/?pageID=ocamodulechunk&L=2&L0=Home&L1=Consumer&sid=Eoca&b=terminalcontent&f=resolve_a_problem&csid=Eoca
Michigan   http://www.michigan.gov/lara/0,4601,7-154-10555_12902_12907---,00.html
Minnesota   http://mn.gov/commerce/insurance/consumers/tools/complaints/insurance-complaints.jsp
Mississippi   http://www.mid.state.ms.us/consumer/request_assistance_file_complaint.aspx
Missouri    http://insurance.mo.gov/consumers/complaints/
Montana   http://www.csi.mt.gov/insurance/Complaint_insurance.asp
Nebraska   http://www.doi.ne.gov/forms/complaint.htm
Nevada   http://www.doi.nv.gov/scs/complaint.aspx
New Hampshire   http://www.nh.gov/insurance/consumers/complaints.htm
New Jersey   http://www.state.nj.us/dobi/consumer.htm
New Mexico  http://www.nmprc.state.nm.us/consumer-relations/docs/crd-insurance-complaint-process-info.pdf
New York   http://www.dfs.ny.gov/consumer/fileacomplaint.htm
North Carolina   http://www.ncdoi.com/Consumer/Consumer_Complaint_Info.aspx
North Dakota   http://www.nd.gov/ndins/consumer/file-a-complaint/
Ohio   http://www.insurance.ohio.gov/Pages/ComplaintMain.aspx
Oklahoma  http://www.ok.gov/oid/Consumers/Consumer_Assistance/Filing_a_Complaint_Instructions/
Oregon   http://insurance.oregon.gov/consumer/tomake.html
Pennsylvania   http://www.portal.state.pa.us/portal/server.pt/community/file_a_complaint/9258
Rhode Island   http://www.dbr.state.ri.us/documents/divisions/insurance/life_accident_health/complaint_form.PDF
South Carolina   http://doi.sc.gov/consumer/Pages/index.aspx
South Dakota   http://dlr.sd.gov/insurance/default.aspx
Tennessee   http://www.tn.gov/commerce/complaint.shtml
Texas   http://www.tdi.texas.gov/consumer/cpportal.html
Utah   http://www.insurance.utah.gov/complaint/index.html
Vermont   http://www.bishca.state.vt.us/insurance/insurance-consumer/consumer-services
Virginia   http://www.scc.virginia.gov/boi/complaint.aspx
Washington   http://www.insurance.wa.gov/consumers/Complaints.shtml
West Virginia   http://www.wvinsurance.gov/consumerservices/ConsumerServices.aspx
Wisconsin   http://oci.wi.gov/com_form.htm
Washington, DC   http://disb.dc.gov/disr/cwp/view,a,1299,Q,616101,disrNav,|32810|,.asp

travel insurance basics