Why was my claim denied?

These are the most common reasons for claim denials.

Clear POD (Proof of Delivery)

What is it?

This is the most common denial reason. It occurs when the recipient didn’t notate any loss or damage on the proof of delivery. For example, if there’s a tear in the pallet’s wrapping resulting from damage but the PoD has “wrap intact” checked as “Yes,” the carrier would deny the claim.

What you can do:

The receiver can avoid this by inspecting freight for external and concealed damages, then notating it right away. It’s also helpful for the receiver to know what kind of commodity items they are receiving; this way, they will know what signs of damage to identify (ex. leaking from a liquid product). 

Incomplete/inadequate documentation

What is it?

In this situation, either the claim’s information was inaccurate, or documents were missing. For example, the copy of the invoice might be illegible or does not reflect the claimed amount. 

What you can do:

First, make sure you provide all of the requested information. The carrier might ask for documents like a copy of the vendor's invoice, so keep your paperwork handy. Next, hold on to your damaged products; you might need to submit additional photos to show the extent of the damage. Once Mothership has this information, we’ll file it back to the carrier. 

Mitigation

What is it?

This claim denial happens when there’s a difference between the amount you’re claiming and the carrier’s limit of liability. For example, you might want to claim the total cost of damaged items because they’re no longer in a condition suitable for customers. However, the carrier won’t cover the total price because the cost is higher than their limit of liability.

What you can do: 

You can mitigate your claim by: 

  • Having the item repaired (in this scenario, be sure to include the repair invoice in the claim)
  • Selling at a discount 
  • Providing proof of complete loss/why a repair is not possible
  • Obtaining return authorization from the supplier for inspection and credit 

When filing a revision, Mothership will include the necessary paperwork such as a copy of the original purchase invoice or itemized repair bill of sales receipt indicating the customer discount allowed. If a claimant is unable to mitigate, they do not have to settle immediately. Instead, the shipper can submit a detailed explanation of why mitigation is not possible (e.g., no scrap value, cost more to repair than replace, etc.) and request the whole claim amount.

Act or Omission of the Shipper

What is it?

The “act of the shipper” rejection happens when the shipper’s conduct is the cause of the in-transit loss or damage. The freight claim declination letter typically highlights what went wrong, allowing the shipper to learn and better prepare for the future.

What you can do:

Claims denials are always less than ideal, but this reason comes with helpful feedback. Whenever you receive an act or omission rejection, use it as an opportunity to assess the weak points in your shipping process. 

Act of God

What is it?

Sometimes, damage stems from circumstances that are entirely out of anyone’s control. The “Act of God” denial is one of those situations. Causes such as natural disasters create damage without putting anyone at fault. According to each carrier's tariff, and as laid out in the bill of lading contract, sometimes nobody is responsible. 

What you can do:

Be grateful for sunny days!

Missing Piece Count

What is it?

For this rejection reason, the shipper claimed missing pieces that were not itemized from the start. The shipment might have the number of pallets recorded but not the number of items included in each pallet. In the carrier’s eyes, they’re only responsible for the pallets as a whole because that’s all they have on record. Although time-consuming, thoroughly inspecting and itemizing the individual pieces in shipments can prevent this rejection. 

What you can do:

Inspect freight before and after delivery. Additionally, be sure to notate signs of tampering or damage on the POD. For example, torn wrapping may be a sign of missing pieces, and notating it on the POD will help when filing a claim. 


For some tips on how to build a strong claim from the start, check out this article.