Definition - What does Rejection mean?

Rejection is a term in insurance that means an insurer will not cover a risk and, therefore, deny someone an insurance policy.

It can also mean that an insurance claim is not addressed because of a faulty claim submission.

Insuranceopedia explains Rejection

An insurance company may opt not to issue someone an insurance policy because it deems that covering a certain risk could be financially disastrous. Some health insurance companies, for instance, will deny insurance to people with certain lifestyles, such as smoking or drug addiction.

Rejection can also mean that an insurance company will not pay a claim because the claim submission has certain errors, meaning that, technically, the company has not officially received it. To correct this, the insured simply has to follow the procedures required by the company and resubmit the claim.

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