5 Reasons Insurance Companies Deny Claims (And How to Fight Back)

Getting an insurance claim denied is frustrating, confusing, and often feels unfair. But here's what most people don't know: insurance companies deny claims constantly, and most denials can be successfully challenged.

In fact, industry data shows that 70-80% of denied claims that go through formal appeals are eventually paid — when the appeal is properly filed.

This article breaks down the 5 most common reasons insurance companies deny claims, and exactly how to fight back against each one.

1. "Pre-Existing Condition"

What this means: The insurer claims your medical issue existed before you bought the policy, so it's not covered.

Why it's often wrong: Insurance companies are notoriously aggressive about labeling things as "pre-existing." A routine check-up years ago? They might call that "evidence" of a pre-existing condition. Had high blood pressure once? They'll try to link it to your current heart issue.

How to fight it:

• Get a letter from your doctor stating when the condition actually began
• Review your policy's exact definition of "pre-existing" — it's usually time-limited (e.g., conditions within 12 months before coverage)
• Point out that symptoms, risk factors, and actual diagnosis are different things
• In many countries, insurers must prove the condition was diagnosed or treated before coverage — suspicion isn't enough

Real example: A 35-year-old had a knee surgery claim denied because he'd seen a physiotherapist for back pain 3 years earlier. His appeal showed the back and knee issues were completely unrelated. Claim paid in full.

2. "Not Medically Necessary"

What this means: The insurance company claims your treatment wasn't essential or could have been done differently for less money.

Why it's often wrong: Insurers love to second-guess doctors. They'll claim a 3-day hospital stay could have been 2 days, or that you should have tried physical therapy before surgery. But here's the thing: your doctor's medical judgment should carry more weight than an insurer's cost-cutting.

How to fight it:

• Get a detailed letter from your treating doctor explaining why the treatment was necessary
• Include medical guidelines or studies supporting the treatment choice
• Point out that the insurer's medical reviewer never examined you
• Reference your policy's coverage of "medically necessary" treatment (most policies say this is determined by your doctor)

Success rate: Medical necessity denials have among the highest overturn rates when challenged — often 80%+.

3. "Policy Exclusion"

What this means: Your treatment falls under something the policy specifically doesn't cover.

Why it's often wrong: Insurance policies are written in dense legal language. Insurers will claim your treatment falls under an exclusion when it actually doesn't. They're betting you won't read the fine print.

How to fight it:

• Read the exact exclusion clause they're citing — word for word
• Look for loopholes: Does the exclusion actually apply to your specific situation?
• Check if the exclusion has exceptions (many do)
• If the exclusion is ambiguous, courts typically rule in favor of the policyholder

Example: A dental procedure was denied as "cosmetic." The appeal showed it was medically necessary to prevent infection. The policy excluded "cosmetic" procedures but defined them as "for appearance only" — not applicable here.

4. "Incomplete or Missing Documentation"

What this means: You didn't submit all the forms, receipts, or medical records they need.

Why it's frustrating: Sometimes insurers deny claims for "missing" documents that you actually submitted. Or they ask for obscure records your doctor doesn't routinely provide.

How to fight it:

• Always keep copies of everything you submit
• If they claim something is missing, resend it with proof of original submission date
• Ask your doctor for a comprehensive medical summary
• Include a checklist showing you've provided everything the policy requires

Pro tip: Send appeals via registered mail or email with read receipts. Proof of delivery matters.

5. "Out-of-Network Provider"

What this means: You saw a doctor or went to a hospital that's not in your insurance network, so they won't pay (or will pay less).

Why it's often wrong: Many denials for "out-of-network" care actually involve emergencies, where you had no choice of provider. Or the insurer's network list was outdated.

How to fight it:

• If it was an emergency, state clearly that you couldn't choose
• Check if your policy has "emergency care" provisions (most do)
• Verify the provider wasn't actually in-network at the time
• Some countries require insurers to pay out-of-network for emergency care

Key fact: In the US, the "No Surprises Act" now protects patients from surprise out-of-network bills in many situations. Similar protections exist in Australia, UK, and other markets.

The Pattern: Why Insurers Deny So Many Claims

Here's the uncomfortable truth: insurance companies make money by collecting premiums and minimizing claim payments.

Every denied claim saves them money — even if only temporarily. They know most people won't appeal. Industry estimates suggest less than 1% of denied claims are actually appealed.

That means if they deny 100 claims unjustly, they might only have to pay out 1 or 2 after appeals. From a business perspective, it's worth denying questionable claims and seeing who fights back.

What to Do When You Get Denied

1. Don't panic — A denial is not the final answer
2. Request a detailed explanation — Get the reason in writing
3. Review your policy — Know exactly what you're entitled to
4. Gather evidence — Medical records, receipts, doctor letters
5. Write a formal appeal — Professional, factual, specific
6. Follow the process — Internal appeal → External review/ombudsman → Legal action (if needed)

How Long Do You Have to Appeal?

This varies by country and policy, but typically:

• US: 180 days for internal appeal
• UK: 8 weeks before escalating to Financial Ombudsman
• Australia: No strict deadline, but faster is better
• Singapore: 6-12 months depending on claim type

Never assume you're out of time — check your specific policy and local regulations.

Get Professional Help

Most people don't appeal because they don't know how. Writing an effective appeal letter requires understanding insurance policy language, regulations, and what arguments actually work.

ClaimBack analyses your denial and generates a professional appeal letter tailored to your country's insurance rules. It takes 3 minutes and gives you everything you need to fight back — no legal expertise required.

The Bottom Line

Insurance companies deny millions of claims every year. Most of those denials are legitimate. But many aren't — and those can be overturned if you're willing to appeal.

The worst thing you can do is accept a denial without questioning it. The best thing you can do is fight back with facts, persistence, and a well-written appeal.

Remember: 80% of properly filed appeals succeed. You just have to be in that 1% who actually try.