West Virginia Adjusters Practice Exam

What does it mean if a claim is 'denied'?

1. The claim is under review

2. The insurer has determined the loss is not covered

3. The insurer needs more information

4. The claim is approved for limited coverage

The correct answer is: The insurer has determined the loss is not covered

A claim being classified as 'denied' signifies that the insurer has reached a decision indicating that the specific loss associated with the claim is not covered by the terms of the insurance policy. This determination often arises from various factors, such as the nature of the loss, the type of insurance coverage in place, or non-compliance with the policy’s requirements. A claim is denied when the evidence presents a clear case that, according to the insurer's guidelines and the policy language, the loss does not meet the criteria for compensation. This situation effectively closes the claim, as it shows that the insurer will not provide any payment or benefits for the reported loss under the existing policy. This contrasts with instances where a claim might be under review (indicating ongoing evaluation), where additional information is required (showing that nothing has been finalized), or where there is approval for limited coverage (suggesting partial benefits are granted). Such nuances are vital for understanding how claims are processed within the insurance industry.