What is a "claim denial"?

A "claim denial" refers specifically to the situation in which an insurance company determines that a claim submitted by a policyholder is not covered by the terms of the insurance policy. This can occur for a variety of reasons, including the nature of the claim not falling within the scope of coverage or the policyholder failing to meet certain conditions required for coverage.

Understanding that a claim denial signifies a definitive decision made by the insurer helps clarify the boundaries of coverage and the obligations of the policyholder. Consequently, when a policyholder receives a claim denial, it often means that they may need to seek alternative solutions for their loss or damage, as the insurer has legally concluded that it is not liable for the claimed expenses.

In contrast, a partial acceptance of a claim does not constitute a denial; it indicates that the insurer agrees to cover some, but not all, aspects of the claim. A formal investigation into a claim usually precedes a decision on whether to accept or deny the claim, while a request for additional documentation may occur within the claims process but does not equate to a denial. Each of these situations serves a different purpose in the claims process and does not reflect the finality of a claim denial.