Top 4 Reasons Insurance Claims Are Denied: And How To Avoid Them

by Mia Taylor
Last updated: 2:45 PM ET, Thu November 21, 2024

To purchase travel insurance or not to purchase? That’s the question travelers often contemplate when making travel reservations, particularly amid the busy holiday travel season when inclement weather is almost always a factor.

Opting to be frugal and forgo a travel insurance policy can save you some money up front, but skipping insurance can also be more costly in the long run, if your trip runs into an unexpected snafu.

Yet another problem travelers experience, according to travel insurance comparison site Squaremouth, is failing to truly understand their insurance policy rules and coverages. This can lead to automatic denials when it comes to filing a claim for reimbursement.

To help avoid this particular challenge, Squaremouth has broken down the top four reason travel insurance claims are typically denied. And to help ensure that you don’t fall into the denial category, the experts at Squaremouth have also offered tips to increase your chances of getting a claim approved. Here’s a closer look.

Purchasing a policy without knowing you were ineligible

Travel insurance only covers unforeseen events, but it seems many travelers think they can buy travel insurance after they become sick, says Squaremouth's Jenna Hummer.

“If you are already sick when buying your policy, any claim related to that same illness will not be covered,” says Hummer.

Some policies, however, offer a pre-existing conditions option, which can refund you if your trip is impacted by an existing sickness or injury, Squaremouth explains.

To obtain this coverage, you usually must buy a policy within 14 to 30 days of making your first trip payment. However, even with this type of coverage, travelers must be medically able to travel when they purchase a policy.

Purchasing travel insurance too late

Sometimes travelers purchase a policy after they hear about a storm, or other events, on the news and file a claim to cancel their trip.

“Typically, if an event is publicized, such as a storm that has been named by The National Hurricane Center, it is too late to buy a policy,” says Hummer.

It’s best to purchase a policy once you’ve made your first booking for a trip to ensure the longest amount of coverage before your trip begins.

Thinking travel insurance covers anything bad that happens

Some travelers think their insurance will pay out because their trip didn't go as smoothly as they planned. That’s wishful thinking.

“In order for a traveler to be covered by travel insurance, their trip must be canceled, cut short, or delayed by a circumstance listed in their policy,” says Hummer. “If the reason is listed, you can be refunded for out-of-pocket trip payments, as well as additional expenses incurred.”

The key takeaway here? Don’t assume you're automatically covered if anything goes wrong, says Hummer.

“If you have specific concerns, make sure they are covered by your policy,” says Hummer. “If you are worried about something that your policy does not cover, you may be able to cancel the policy for a full or partial refund.”

And one more tip on this front: Travelers who want the broadest level of coverage for “anything”, should consider purchasing Cancel For Any Reason coverage. This time-sensitive upgrade allows them to cancel for a reason not listed in the policy.

Forgetting to keep receipts

In order to be refunded, travelers typically need to provide proof of the expenses they incurred. Stands to reason right? But this is a point that’s lost on some travelers, it seems.

“Receipts are required to authenticate a claim, whether it's for a cancellation, delay, or medical emergency,” says Hummer.

When spending money, ask for receipts to document any expenses incurred. If you forget, or if receipts are not available, your bank or credit card statement will usually prove you made the payments you are claiming, concludes Hummer.