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CO-P27 Denial Code: Denied Under Liability Coverage Rules

CO-P27 means an auto insurer denied payment based on the jurisdictional regulations or payment policies for liability coverage benefits. The liability carrier won't pay this bill, and the cited regulation explains why.

Quick facts

Code
CO-P27 (CARC P27)
Status
Active In use since November 1, 2017.
Code set
Claim Adjustment Reason Codes (CARC)
Group codes
  • CO (Contractual Obligation): The usual group. The liability carrier won't pay; the provider pursues other coverage and follows state rules before billing the claimant.
  • PR (Patient Responsibility): Used when the carrier indicates the patient is responsible. The patient's own PIP, medical payments, or health coverage may still apply.
Official description
Payment denied based on the Liability Coverage Benefits jurisdictional regulations and/or payment policies. Usage: If adjustment is at the Claim Level, the payer must send and the provider should refer to the 835 Insurance Policy Number Segment (Loop 2100 Other Claim Related Information REF qualifier 'IG') if the jurisdictional regulation applies. If adjustment is at the Line Level, the payer must send and the provider should refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment information REF) if the regulations apply. To be used for Property and Casualty Auto only.
X12 Claim Adjustment Reason Codes, retrieved September 25, 2026
Last verified
against the official X12 list.

What CO-P27 means

CARC P27 says payment denied based on the liability coverage benefits jurisdictional regulations and/or payment policies. X12 limits it to property and casualty auto claims.

In an auto accident, the at-fault driver’s liability coverage may pay for the other party’s injuries. When a liability carrier receives a medical bill and decides it isn’t payable under its policy or the state’s rules, it denies with CO-P27 and cites the regulation.

Liability carriers often deny medical bills for reasons that have little to do with the care itself: disputed fault, no coverage on the date of loss, the injury not being related to the accident, or a policy that doesn’t pay providers directly before settlement.

This is the liability counterpart to CO-P21 for PIP and medical payments coverage.

Common causes

  • Fault disputed or not accepted by the liability carrier.
  • Policy not in force on the date of loss.
  • Injury or treatment unrelated to the accident.
  • Carrier policy of settling with the claimant rather than paying providers directly.
  • Required documentation missing under the carrier’s rules.

How to fix it

  1. Read the remark codes and cited regulation.
  2. Determine whether the patient has other auto coverage, such as their own PIP or medical payments.
  3. Bill that coverage or the health plan, attaching the liability denial.
  4. If the patient has an attorney, notify them of your bill; some practices use liens where state law allows.
  5. Request reconsideration if the carrier’s facts are wrong.
  6. Check state rules before billing the patient.

How to prevent problems

  • Identify all auto coverages at intake, both the patient’s own and the at-fault party’s.
  • Bill first-party coverage first when state rules call for it.
  • Track accident cases separately from health insurance claims. See eligibility and COB denials.

Specialty notes

Emergency departments and trauma providers often bill liability carriers first because accident details are incomplete at the time of treatment, which makes CO-P27 denials common in those settings.

Remark codes that may appear with CO-P27

  • N578 (Coverages do not apply to this loss.): Coverages don't apply to this loss.
  • N576 (Services not related to the specific incident/claim/accident/loss being reported.): Services aren't related to the specific incident, claim, or accident reported.
  • N650 (This policy was not in effect for this date of loss.): The policy wasn't in effect for the date of loss.
  • CO-P28 (Payment adjusted based on the Liability Coverage Benefits jurisdictional regulations and/or payment policies.): Payment adjusted, rather than denied, under liability coverage rules.
  • CO-P29 (Liability Benefits jurisdictional fee schedule adjustment.): A liability benefits fee schedule adjustment.
  • CO-20 (This injury/illness is covered by the liability carrier.): A health plan says a liability carrier covers the injury.
  • CO-P21 (Payment denied based on the Medical Payments Coverage (MPC) and/or Personal Injury Protection (PIP)): Denied under MPC or PIP rules instead of liability coverage.

CO-P27 FAQ

How is liability coverage different from PIP?

Liability coverage pays for injuries the insured causes to others. PIP and medical payments coverage pay the insured's own medical expenses regardless of fault. A liability carrier's denial often turns on fault or coverage questions.

Where do I bill after CO-P27?

Check for the patient's own auto PIP or medical payments coverage, then their health plan. Send the liability denial along with the claim.

Where is the regulation cited?

At claim level, in the 835 insurance policy number segment (loop 2100 REF, qualifier IG). At line level, in the healthcare policy identification segment (loop 2110 REF), when regulations apply.

Is CO-P27 used for workers' comp?

No. X12 limits it to property and casualty auto claims.

Can a liability carrier pay later even after CO-P27?

Sometimes. Medical costs may be addressed later as part of a settlement with the injured person, rather than paid directly to providers on each bill.