Did you know that as a collision repair shop owner, you can play a crucial role in assisting your customers with identifying areas where insurers might take advantage of them? This is especially important in today’s world where it has become more common for insurers to push necessary repair expenses back on the customer in order to reduce claim costs.
Being an advocate for your customers builds loyalty and trust among other benefits. By offering guidance, information, and support, you can help them make informed decisions based on the rights identified in their policy. Having this knowledge, along with your support, will not only set their expectations properly, but also help them avoid and address short pays and denials –increasing the chances your services will be paid.
Click here to join ATI’s FREE webinar, How to Get Paid by Insurers, to discover strategies to fight for what you're owed.
Customer denials by insurers refer to situations where an insurance company refuses to pay estimates submitted by the policyholder. These denials can be distressing for the customer, especially if they believe the claim should be covered under their insurance policy.
Here are some common reasons for customer denials by insurers:
1. Lack of Coverage: The most straightforward reason for a denial is that the specific type of claim is not covered by the policy. It's essential for customers to thoroughly understand the terms and conditions of their insurance policy to avoid surprises.
2. Policy Exclusions: Insurance policies often have specific events or circumstances that are not covered.
3. Failure to Disclose Information: If the policyholder fails to disclose relevant information or provides inaccurate information during the application process, the insurer may deny the claim.
4. Lapsed Policy: If the policyholder has not paid their insurance premiums on time, the policy may have lapsed, and the insurer may deny claims submitted during the period of non-payment.
5. Insufficient Documentation: If the claim documentation is incomplete, lacks necessary details, or doesn't meet the requirements set by the insurer, the claim may be denied.
6. Late Reporting: Customers are typically required to report incidents and claims promptly. If there is a significant delay in reporting the claim, the insurer might deny coverage.
7. Policy Limitations: Insurance policies often have coverage limits, such as maximum benefit amounts or specific sub-limits for certain types of claims. If the claim exceeds these limits, it may be denied or partially paid.
8. Disputed Liability: In liability-based claims, such as auto accidents, the insurer may deny coverage if they dispute their policyholder's liability for the incident.
What should the customer do in the event verbal denials are received?... Demand a denial letter. This letter will outline why the repairs are being denied according to their policy. It should include the page number, paragraph and sentence identifying why the denial position has been taken – which is the information needed to dispute it.
To dispute a denial letter, have your customer follow these steps:
1. Review the denial letter to understand the reasons for the decision.
2. Contact the insurer to discuss the denial and seek clarification on the reasons.
3. Gather additional evidence to support the insured’s claim against the insurer.
4. Follow the insurer’s appeal process to submit additional information and arguments for why the claim should be covered.
5. Seek legal advice from an attorney experience in insurance matters if an appeal is unsuccessful or if the customer believes the denial is unjust.
6. File a complaint with the state insurance department or regulatory agency if they believe the insurance company is acting unfairly or in violation of insurance regulations.
It's important for customers to know their rights and be proactive in addressing claim denials. Sometimes, claims are denied due to misunderstandings or errors, and with proper documentation and persistence, the issue may be resolved in the customer's favor.
Dealing with insurance disputes can be stressful for customers, so it's essential to provide support and transparency throughout the process. Their perception of your shop can be heavily influenced by how well you help them handle conflicts with insurers. By providing an improved customer experience, your shop will gain a great reputation and build lasting customer relationships.
Join ATI’s FREE webinar, How to Get Paid by Insurers, to discover strategies to fight for what you're owed.
About the Author
ATI’s Vice President of Collision Services Keith Manich has over 40 years in the collision repair industry working as a technician, painter, and shop manager in small and large shops. He is a former I-CAR instructor of the year and has extensive knowledge in the financial and lean production areas.
