What is an example of a denied claim?

Asked by: Felicity Homenick II  |  Last update: March 24, 2026
Score: 4.9/5 (40 votes)

An example of a denied claim is when your health insurance company refuses to pay for a CT scan because you didn't get prior authorization, even if the scan was medically necessary, or a home insurance claim is denied because the damage was due to poor maintenance (like mold) rather than a covered event like a fire. Denials happen when you don't follow rules, lack documentation, use out-of-network providers, or the service isn't deemed medically necessary.

Which is an example of a denied claim?

For example: A claim is submitted with three line items. Two of the services are paid; one is rejected because the CPT code was invalid. When resubmitting a new claim with the corrected CPT code, do not include the two services previously paid, as they will deny as duplicate.

What is the most common claim denial?

Claim not filed on time (aka: Timely Filing)

If a proper claim is submitted, but it's not within the timing window, it may result in a denial. It is recommended that you check with your Payers regarding their filing deadlines.

What is a denied claim?

Denial of claim is the refusal of an insurance company or health plan to cover the cost of treatment that has been provided by a health care professional. Denial of a claim is not the same thing as a claim being covered but billed to the patient because they haven't yet met their deductible.

What are 5 reasons a claim may be denied?

Five common reasons for claim denials include incorrect patient/policy info, lack of prior authorization, services not medically necessary or covered, coding errors, and missed filing deadlines, all leading to payment refusal by the insurer. These issues often stem from clerical mistakes or misunderstandings about coverage, requiring correction or appeal to resolve. 

Consumer Reports: How to appeal a denied insurance claim

15 related questions found

What to say when insurance denies a claim?

When insurance denies a claim, you should first request the specific reason for denial, then file a formal internal appeal, providing a clear explanation, supporting documents (medical records, photos, estimates), and citing policy language, all while adhering to strict deadlines. If the internal appeal fails, you can escalate to an external review by an independent third party or contact your state's Department of Insurance, and even consult a lawyer for complex cases. 

What are the three types of claim denials?

Insurance carriers issue denials or underpayments for many reasons. The major denial or underpayment classifications are generally technical/administrative, coding/billing, medical necessity (including level-of-care or medical necessity of a procedure or service), and clinical validation.

What not to say to an insurance claim adjuster?

When talking to an insurance adjuster, never admit fault, apologize, speculate on injuries or the accident's cause, agree to a recorded statement, or give unnecessary details, as these can be twisted to weaken your claim; instead, stick to basic facts and state you're working with an attorney if possible. Avoid phrases like "I'm fine," "It was my fault," or discussing social media, and never accept immediate settlement offers. 

Why would an insurance company deny a claim?

Policy Limits: If the repair costs exceed your policy limits, the insurance company may only offer partial coverage or deny your claim. Human Error: A claims adjuster may deny a claim if someone entered invalid information into the application, such as an incorrect or outdated code, or made another input error.

How do you respond to a denied claim?

Here are some tips for handling rejected claims:

  1. Review the Rejection Reason: Determine the specific reason for rejection.
  2. Collect Supporting Evidence: Gather all necessary documents that can prove the validity of your claim.
  3. Consult a Legal Advisor: If necessary, consult legal advisors to help you appeal the decision.

Which insurance company denies most claims?

There isn't one single company that denies the most claims across all types of insurance, but for health insurance, data from 2023 shows AvMed, UnitedHealthcare (UHC), and Blue Cross Blue Shield of Alabama had some of the highest denial rates (around 33-35%) for Marketplace plans, while Progressive is often cited by lawyers as aggressive in denying other types of claims. Denial rates vary significantly by state, plan type (employer vs. individual), and the specific insurer, with large companies generally having more denials due to their large customer base. 

What are the three most common mistakes on a claim that will cause denials?

Here, we discuss the first five most common medical coding and billing mistakes that cause claim denials so you can avoid them in your business:

  • Claim is not specific enough. ...
  • Claim is missing information. ...
  • Claim not filed on time (aka: Timely Filing)

What is the 80% rule in insurance?

The 80% insurance rule (or 80/20 coinsurance) in homeowners insurance requires you to insure your home for at least 80% of its total replacement cost to receive full coverage for partial losses, preventing large out-of-pocket expenses from underinsurance penalties. If your coverage is below this threshold, the insurer applies a penalty, paying only a percentage of your claim based on how close you are to the 80% mark, not the full repair cost. This rule ensures you can rebuild your home after a major event like a fire or storm by covering current material and labor costs, excluding the land value. 

What is the primary reason for a claim to be denied?

Incomplete or Inaccurate Information

Incomplete or incorrect details on the insurance application are one of the most frequent causes of claim rejections. All forms must be completed with honesty and complete transparency.

Why would an insurance company reject a claim?

you didn't tell your insurer about a change in your circumstances. you haven't followed the claims process correctly. you haven't kept to a condition of your policy. you have exaggerated the claim and are trying to claim for more than you should.

Who determines a denied claim?

Insurance carriers will identify if a claim is denied or rejected. If the claim(s) were never processed by the insurance carrier, due to errors they perceive could be corrected before processing, then it is a rejection.

What are 5 reasons a claim might be denied for payment?

Five common reasons for claim denials include incorrect patient/policy info, lack of prior authorization, services not medically necessary or covered, coding errors, and missed filing deadlines, all leading to payment refusal by the insurer. These issues often stem from clerical mistakes or misunderstandings about coverage, requiring correction or appeal to resolve. 

Can I sue insurance for denying a claim?

When the insurance company fails to honor your policy or refuses to compensate you for your losses, you have the right to file a lawsuit. Insurance companies are typically profit-driven, but while denying your claim may be in your provider's best interest, it's not in yours. You have damages that require compensation.

How long does a denied insurance claim stay on your record?

While most claims remain on your record for five to seven years, the exact length of time depends on a few factors, like your insurance company and the severity of the claim. Usually larger, more expensive claims stay on your record for longer, whereas smaller, less expensive claims might be removed earlier.

What insurance adjusters won't tell you?

What they won't tell you is that their primary job is to save their company money—often at your expense. Insurance adjusters are not your advocates. They're trained professionals whose performance is measured by how much they save their company. Every dollar you don't receive is a dollar their employer keeps.

What are the 3 D's of insurance claims?

The 3 D's of insurance are “delay, deny, and defend.” They represent the 3-part strategy insurance companies use to avoid paying policyholders what they may be owed. These tactics may pressure some Americans into accepting lowball settlements, and they can result in claims being held up in court for years.

What are red flags for insurance companies?

8 Red Flags That Insurance Companies Aren't Going to Cover Your Bills

  • A Claim Is Denied Without a Reason. ...
  • Stalling Techniques Keep You In Limbo. ...
  • They're Too Quick to Offer a Low Settlement. ...
  • They Bury You in Paperwork. ...
  • You're Pressured to Sign Something. ...
  • They Want to Record You. ...
  • The Severity of Your Injuries is Questioned.

What insurance has the most denials?

There isn't one single company that denies the most claims across all types of insurance, but for health insurance, data from 2023 shows AvMed, UnitedHealthcare (UHC), and Blue Cross Blue Shield of Alabama had some of the highest denial rates (around 33-35%) for Marketplace plans, while Progressive is often cited by lawyers as aggressive in denying other types of claims. Denial rates vary significantly by state, plan type (employer vs. individual), and the specific insurer, with large companies generally having more denials due to their large customer base. 

What reasons are common for denials?

Common reasons for a denial and examples of appeal letters

  • Treatment that's not medically necessary. ...
  • Mental health and substance abuse. ...
  • Gender-affirming care. ...
  • Out-of-network providers. ...
  • Where you get health care (in-home care vs. ...
  • Policy canceled because you didn't pay. ...
  • When your appeal is denied by your insurer.

What is the 4 denial code?

Denial code 4 is used when the procedure code is inconsistent with the modifier that was used. This means that the modifier attached to the procedure code does not match the requirements or guidelines set by the payer.