Why Companies Close Car Insurance Claims?


We often get messages from people looking for help with their car insurance claims. The most common message we get states simply, "My car insurance claim is closed", and these people often feel lost and confused. If your car insurance claim has been closed you should receive a letter from your insurance company adjuster explaining why but here are a few of the most common reasons.

Your Claim was Deemed Fraudulent

Believe it or not, there are some people who try to file fraudulent insurance claims. If you are one of those people, you will likely be caught and your will quickly find your car insurance claim is closed. Examples of fraudulent claims include pretending to have medical injuries that do not exist or lying about the number of drivers living in your household to avoid paying higher rates. Lying on your insurance application is also considered fraud and adjusters usually find the inaccuracies in your application when they investigate the circumstances of submitted claims.

You've Exhausted Your Policy Limits

Another common reason for closing a car insurance claim is simply because you've exhausted your limits of liability. Let's say, for example, you purchase a bodily injury liability limit of $20,000 per person, $40,000 per accident, and another $10,000 in property damage liability. The person you injured has $30,000 in medical bills and has bills totaling $15,000 in property damage.

Your insurance company will stop paying after the first $20,000 in medical bills (assuming you only injured one person) and will only pay $10,000 in property damage. The balance of $15,000 is your responsibility and your auto insurance company is not obligated to help you. Your car insurance claim is closed once your insurance company meets its obligations.

Your Claim is Settled

The best reason for seeing your claim closed is, of course, having it completely settled. You'll receive a letter from your auto insurance carrier letting you know your car insurance claim is closed once all of your bills are paid. You no longer have any financial obligation regarding that incident and your insurance company considers the incident resolved.

Every insurance company handles the claim settlement process differently. If you are confused or have questions, make sure you contact your claims adjuster directly. He or she will gladly walk you through the claims process, explaining every step of the way.

Popular Articles