Key Takeaways
- Most claim denials trace back to a small set of preventable, well-documented reasons.
- Insurers are required to explain why a claim was denied — always request that explanation in writing.
- You have the right to appeal a denial, and many overturned claims start with a formal written appeal.
- Reading your policy before you file — not after — dramatically reduces the risk of a denial.
A Denial Is a Decision, Not a Verdict
Getting a claim denied is one of the most frustrating experiences in insurance. You paid your premiums, something went wrong, and then the company says no. But a denial is not automatically the final word. Insurers must tell you why they denied the claim, and in most cases you have a formal path to challenge that decision.
Understanding the most common reasons claims get denied — and the mistakes that lead there — puts you in a much stronger position to respond. Before diving into specific errors, it helps to know that many denials are tied to policy misunderstandings. Our guide on reading an insurance policy before you sign walks through the sections most likely to trip people up.
Filing a claim for something your policy explicitly excludes.
Why it happens: Many policyholders assume broad coverage without reading the exclusions section, which can be buried deep in the policy document.
Waiting too long to report the incident or file the claim.
Why it happens: People often delay because they hope the situation will resolve on its own, or they are uncertain whether the loss meets the deductible threshold.
Submitting incomplete or inconsistent documentation.
Why it happens: Claimants underestimate how much supporting evidence insurers require, or they submit information that conflicts with earlier statements.
Letting the policy lapse or missing a premium payment before the incident.
Why it happens: Automatic payments fail, billing addresses change, or policyholders simply lose track of renewal dates.
Misrepresenting information on the original application.
Why it happens: Applicants sometimes omit health history, prior claims, or property details — either intentionally or because they assumed it was irrelevant.
How to Respond After a Denial
Once you receive a denial, your first move should be to get the full written explanation from your insurer — called an Explanation of Benefits (EOB) for health claims or a denial letter for property and auto claims. Read it carefully. The specific reason matters, because it determines your next step.
~43%
Health insurance appeals that succeed
Data from the Kaiser Family Foundation has shown that consumers who appeal ACA marketplace plan denials win a significant share of those appeals, underscoring that denials are frequently reversible.
1 in 7
In-network health claims initially denied
According to a Kaiser Family Foundation analysis of ACA marketplace plans, roughly one in seven in-network claims was denied, though denial rates varied widely by insurer.
For most policy types, you have the right to file an internal appeal directly with your insurer. Submit a clear written letter that addresses the stated reason for denial point by point. Include any supporting documentation: repair estimates, medical records, photographs, receipts, or contractor assessments. Keep copies of everything you send and note the date.
If your internal appeal is rejected, many states allow you to request an external review by an independent third party. For health insurance, this right is guaranteed under federal law for most plans. State insurance departments also handle consumer complaints and can sometimes facilitate resolution. Contact your state's department of insurance if you feel the denial is improper or the process is stalling.
Avoiding common filing errors also reduces the chance of a denial in the first place. See our companion piece on filing an insurance claim without making it harder on yourself for step-by-step guidance. And if you suspect your understanding of what your policy covers may have played a role, things people commonly get wrong about coverage is worth a read alongside common insurance myths that leave people worse off.
This article is for general informational purposes only and does not constitute personalized insurance, legal, or financial advice. Coverage terms, appeal rights, and timelines vary by policy, insurer, and state. Always read your actual policy documents and consult a licensed insurance agent or attorney for guidance specific to your situation.