Insurance cover is not as straightforward as many other products in the market. In some instances, insurance companies can deny coverage:
1. Driving an old car
Ireland’s big motor insurance companies are refusing to cover old cars. Customers driving vehicles that are 15 years or older are denied insurance cover, even if they have a valid NCT that provides their cars are safe to be driven. Insurers claim that such cars are more likely to be involved in fraud cases, can cause more collisions, are poorly maintained and have bald tyres. It is said that whenever older cars are involved, the frequency of personal injury is higher. However, motorists should know that this rule applies to new clients only; the existing customers whose vehicles have passed the threshold would still be covered.
2. Denied policies
If a client has a type of insurance with a carrier offering multiple lines of cover, then the insurer is under no guarantee to commend any application the client submits for an additional cover. The insurer will have to underwrite and evaluate the client’s application just as any other applicant, and will either decline or approve the policy based on the risks the client presents.
3. Cancellation
Cancellation is a strike against a client’s insurance record. It is, therefore, important to avoid it. Paying your premium on time is essential, as is being truthful when giving information to potential insurers and avoiding driving under the influence. Most people are tempted to lie about tickets or their recent traffic offences, but eventually, that will destroy the health of your driving record and credit. When a client’s insurance company cancels their policy, that will stay on their record for years. Nevertheless, if the client gets many cancellations in a year, then most insurance companies would deny you their policy because such a client is a “high risk” insured. That will only mean the client can go to a high- risk carrier and they will have to pay up to five times what is paid on normal rates that they used to pay at a standard insurance carrier.
4. Denied claims
Even though a client may pay their premiums on time regularly, their insurance company may not pay the reported claim. First of all, the policy may not cover the situation that surrounds the claim, but may be one the exclusions listed. Secondly, if the insurer finds out that the damage was caused by the insured, then the claim might be denied. Finally, a claim could be at a level of deductible, implying that client is accountable for paying it.
5. Non-renewal
It is not the obligation of an insurance company to renew the insurance policy for a policyholder. An insurance company can issue a non-renewal notice if:
- A client has filed several claims in a short time
- The credit rating of a client is declining sharply and their present insurer sees them as a liability
- The carrier has decided to pull out of a certain line of business or is restructure its insurance line of business and is discounting a client’s policy through no fault of their own
If a customer has been or is a victim of any of the above reasons, then the insurer can choose not to renew the policy. In some instances, additional premiums may simply be added to reflect the risk that has been increased.