Can an insurance company refuse to pay a claim? They can and do denial claims on a regular basis. You want to ensure that your insurance company offers you the best settlement possible if you find yourself in an unfortunate position where you have to file an auto-related claim. You may have to take legal action if a claim is denied.
It is a good idea to read the fine print in your policy. This may provide information about how your insurer will pay for claims. You can look at your policy to find out why your claim was denied if it was denied.
A denial decision does not have to mean the end of your case. If you feel you have been treated unfairly by your insurance company after reviewing your policy, you may be able to negotiate with them to reach a mutually agreeable decision. Let’s look at what that could look like.
What is an insurance claim denial?
Let’s suppose you have filed a claim for damages to your vehicle after a fender bender. You know your policy covers collision coverage so you are certain you will soon receive a check. Instead, you get a letter from us stating that we regret to inform you that your claim was denied. You may also receive a letter from us stating that we regret to inform you. This will cover a very small amount of damage done to your vehicle, far less than your deductible.
This is an example of insurance claim denial. Your insurance company may deny your claim. If the accident was caused by another driver, the denial may come from their insurance company. It doesn’t matter what, it usually means that you don’t have the funds to fix your car or pay for your medical bills. You may be overwhelmed at first.
What made my claim rejected?
The insurance claim adjusters are employees of your insurance company. Their sole task is to evaluate each claim and determine if the company has a legal obligation to pay claims. It’s important that you understand the latest laws and rules governing insurance obligations.
Most claims that have documented damage are valid. Depending on the testimony of witnesses to the collision or loss, the claim will usually be approved without incident. Some cases can be a little complicated and an insurance claim may be denied for a variety of reasons. These are some common reasons that an insurance claim may be denied or questioned:
- Your coverage is not sufficient to cover your claim. If you have $25,000 bodily injury liability coverage, and your accident results in $35,000 in medical injuries to the other driver’s head, then the $10K additional would be denied.
- You don’t have enough coverage. Your claim could be denied if you have not been provided with comprehensive coverage for non-accidental losses.
- There may be discrepancies in your initial application for insurance. Your insurer may refuse to cover a claim if you aren’t entirely honest with your application or if you don’t provide accurate information. Examples of this include underreporting mileage and failing to mention specific upgrades.
- You violated the law in your claimable accident. Your claim could be denied if you are found to have been under the influence or driving without a licence at the time of the accident.
- You failed to report the accident promptly. Your claim could be denied if you fail to notify the police or your insurer. Your insurer may suspect insurance fraud if you suddenly claim that you have whiplash after an accident.
What should you do if your claim gets denied?
These are valid reasons an insurer could deny your claim. If your case gets to court, the reasons might be upheld. You may be wondering, “What do I do if my claim for car insurance is denied?” What steps can I take to make it more likely I will be able to reverse the decision?
Notify the insurance company immediately.
Many insurance companies allow you to start the claim process online. This means that you can do it while you wait for the police to arrive. However, if you are unable to do so, contact your agent immediately. You should immediately get the information of the other driver’s insurer. Never let the other driver stop you from calling the police. If you have to support a claim, a police report is a great help. To verify the extent and severity of the damage, it is important to take many photos or video footage as part of your due diligence when initiating a claim.
Be sure to verify that your claim is filed with your company
Avoid filing a claim against the other driver’s insurance company if possible. Even if the insurer has to pay out due to the fault of the other driver. Your insurer may be able to help you recover expenses from another driver’s insurance company through a process known as subrogation. Your insurer is more knowledgeable than you are in legal and insurance matters, so let them handle the heavy lifting.
Get detailed estimates
You will usually get a better result with your claim if you have more information. This can be done by having your repair shop provide you with a detailed, itemized estimate of the repairs. Do not make the mistake to go to just any repair shop for your estimates.
Ask your family and friends for recommendations to help you find a trustworthy mechanic and get estimates from them. To verify the going rates, your insurer may tell you to get an estimate at a specific shop.
Get an estimate based on OEM parts
After repairs, you have the right to have your vehicle returned in the same condition as it was before the accident. Some insurers require that you have a specific rider added to your policy in order to request OEM parts. This is something you should inquire about when you sign up. It’s worth the extra money to get this coverage.
If you are not satisfied with the auto insurance settlement, know your rights
You should expect a lower payout if your car is totaled in a total loss.
Car insurance companies usually insure vehicles based on the “Actual Cash Valuation” (ACV). The resale price will determine how much compensation they offer to replace your car. The exact amount they offer to replace your car could differ depending on the service they provide to determine its market value.
You may have to do some research if you believe your car has a higher value than the ACV. You might consider how well you cared for the car. This could include whether you kept the car in a garage, did regular maintenance, and how clean it was. You might need to keep receipts and documentation if you take good care of your cars.
How to contest a claim denial
Request a dispute and first try mediation if you feel you have a legitimate reason to contest a denial of your claim. Mediation and dispute resolution are both possible without the need for legal representation. It’s also less costly.
Do not sign any paperwork agreeing or cashing any insurance checks. Only then can you consider the process of filing for a dispute.
The arbitrator, a neutral party who is able to provide an estimate for you after you have requested mediation. After reviewing the information from both sides, they will either rule for or against you.
An independent claims adjuster can also be hired to work with the insurer and the mediator. They will serve your interests and not the insurance company’s.
If mediation fails to resolve your issues, you can hire an attorney, or visit your state’s Department of Insurance. They will refer the case to arbitration. An appraiser will conduct the arbitration. He or she will review both sides’ information, and make a legally binding decision.
- If you are involved in an accident, immediately file a claim with your insurance. Make sure to provide as much documentation as possible.
- You can request a change in your company’s decision regarding a claim denial.
- A mediator can help you appeal the decision.
- The last resort is to go to the Department of Insurance in your state and file an appeal.
What next steps should you take if your car insurance claims are denied? Document everything from medical bills to police reports, and even repair estimates. You can also ask a mediator for assistance to evaluate the situation. Even if that fails, you can ask a mediator to help you assess the situation. It is important to understand your rights and policy coverage so you can make informed decisions regarding claims payout.