What to Do When Your Car Insurance Claim Is Denied
What to do when your car insurance claim is denied? This must be a question surely running in your mind if you have suffered in an accident, and it was not your fault. You did everything you were supposed to, you got names of the witnesses, pictures of the accident scene, got medical treatment, reported the accident, did not miss your doctor’s visits, and made a claim. But, your claim was denied. Just because they denied your claim does not mean you abandon and end negotiations. So, what do you do? Firstly, you need to understand why your claim was denied.
Understanding the reason for denial is very important. The decision of the insurance company will be explained in the claim denial letter, and you need to go through the document carefully and understand their reasoning. Though claims can be denied for various reasons, the most common ones are as follows.
The accident is not covered by your car insurance policy. Car insurance policies offer different types of coverage like collision coverage or liability coverage. If your accident does not fall within the coverage that you purchased then your claim will not be accepted. You missed some filing deadline or your coverage might have lapsed. If you have forgotten to pay your premiums, your insurance policy will lapse, and if your policy is not active anymore then you will no longer be covered. It is crucial to file deadlines, and act fast after your accident.
You are not named on the policy. If your name is in the contract, only then will you be covered by the insurance policy. So, if your name is not there in the policy, you are not covered.
The damage amount is more than the limits of the auto policy. Though in such case there will be a limitation in damages and not a complete insurance claim denial, the insurance company might also deny the complete claim. You were responsible for the accident. If according to the insurance adjuster, you caused the accident, then your claim can be denied.
If the stated reason for your claim being denied does not reflect the real facts of your claim, then you can dispute the decision. If you have decided to dispute the denial, you can take the following action:
Send a letter to the insurance company stating where their fault is and do not forget to attach documentation to support your claim. Generally, they will negotiate with you, and you will be offered a fair settlement.
You can appeal the decision of the company to the State Insurance Commissioner. You can file suit against the insurance company for breach of contract, bad faith insurance practices, or/and violations of the insurance code of your state. If you want to follow this option then you must appoint an insurance bad faith lawyer to handle the procedure carefully.
After you threaten or take action under an insurance bad faith claim, chances are the insurance company might reopen your claim, and continue with their investigation. However, if the company stays firm, and you feel you are not getting justice, then you can go ahead with a bad faith insurance lawsuit.