What To Do After Your Car Insurance Claim is Denied
Car accidents can be stressful, painful, and expensive events. Vehicle repairs and replacements, property damage, physical injuries, and emotional trauma can be devastating financially. Since you have insurance, you are relieved that these costs will not have to come out of your pocket.
Indeed, it is a relief until your insurance company unexpectedly denies your claim. At times, there are legitimate reasons that claims are denied, but often the reasons are not valid, meaning the insurance company is acting in bad faith. Understanding the reason for the denial is essential so you can devise a strategy for how to proceed.
Common Reasons Insurance Companies Deny Claims
If an insurance company believes it can legitimately deny a claim, it will, without a doubt. The insurance industry is a profitable one. If it can escape paying a claim because they legitimately believe they do not have a contractual obligation to pay it, it will reject your claim.
Listed below are some of the more common reasons that insurance claims are rejected:
- The automobile insurance policy does not cover the claimant
- Failure to list the vehicle on the car insurance policy
- The policy was suspended or was not in effect when the accident occurred
- The policy has limits that the claim exceeds
- The insurance company investigated the car accident with findings that demonstrate they are not liable for coverage due to the at-fault driver.
- Impaired drivers may be denied coverage.
- Drivers operating a vehicle without a driver’s license may have their claim denied.
- Claims are denied when preexisting injuries are claimed as current harm
- Vehicle repairs are attributed to the accident when in fact, they occurred in an unrelated event
- The policy does not cover what is being claimed
- The timeline of reporting the accident to your automobile insurance company was overlooked.
- You lied when applying for insurance coverage or when filing a claim.
It’s possible that your insurance company is not in the wrong when denying your claim for any of the reasons listed above. But, any of these denials could be made erroneously. Insurance companies may prematurely deny claims with the hope that the matter will be dropped because the claimant is discouraged and does not understand they can pursue an appeal. Evidently, it works often enough because they repeatedly do it. When insurance companies deny valid claims, they are acting in bad faith.
Two Types of Car Insurance Claims
There are two types of claims you may deal with if you have been in an automobile accident. The type of claim you will file depends on the circumstances surrounding the accident and your insurance coverage.
First-Party Insurance Claim
Following a car accident, you may need to file a first-party insurance claim. This simply means you will file the claim with your own insurance company. Neither Arizona nor California are no-fault states, but you will file with your own company if you have no-fault insurance. Personal injury protection (PIP) or medical payments coverage are policies filed with your own insurance company.
You will also file an insurance claim with your insurance carrier if the accident resulted from your own actions. The responsible party will be determined by law enforcement. You will be charged if they decide you are accountable for the accident.
Finally, if the accident was not your fault, you may still have to file an insurance claim with your own insurance company. If the driver determined to be at fault were uninsured, you would have to look to your insurance to provide compensation.
Third-Party Insurance Claim
When you are involved in an accident that is not your fault, you will typically file a claim with the liable party’s insurance. If you file a third-party claim, you often stand a bigger risk of being denied. The insurance company’s primary obligation is to their policyholder, not to you.
Why are First-Party Claims More Effective?
First-party claims are more likely to be accepted because of your legal contract with your insurance company. They are bound by law to provide the benefits they committed to in your insurance policy. State laws govern the relationship between insurance companies and their policyholders.
Appealing Your Automobile Insurance Claim Denial
Following an accident, the last thing you want to deal with is the insurance company beating around the bush when settling your claim. An insurance claim denial attorney can aid you in filing an appeal if you feel your claim was wrongly denied.
Insurance companies know many clients will file appeals when they feel they have been treated unfairly. So, they have a system for you to contest a denied claim. Consider the following steps if you are appealing an unjust insurance claim:
- Assemble evidence by reviewing the police reports, testimony from witnesses, photos and videos of the scene, medical reports, road conditions, and any other evidence that might support your claim. Your attorney will retain possession of any original documents while sharing copies with the insurance company.
- Submit a letter of appeal outlining why you disagree with the insurance company’s denial of your claim. Providing detailed information that refers to the policy and makes connections with the evidence you assembled in great detail can persuade the insurance company to correct its mistake.
- Seek legal counsel to review the evidence and draft the appeal letter. If your claim has been denied, an experienced insurance claim denial lawyer’s help may be crucial to getting any settlement at all.
The insurance industry exists not to protect you but to make profits. Sometimes, the process of getting the compensation to which you are entitled can be overwhelming, especially if you have experienced an accident and need to focus on your recovery. A seasoned attorney specializing in insurance claim denial cases understands how to approach the insurance company with evidence and policy details so that they provide you with the benefits you are owed.
When You are Facing a Bad Faith Insurance Claim Denial, Turn to Us For Help
The attorneys with Dawson & Rosenthal have over 50 years of combined experience with standing up for the little guy. Contact us today for a free consultation so that we can determine if your car insurance claim was denied in bad faith. Our goal is to get your claim approved and achieve the maximum settlement possible for you.