The First 5 Things to Do If Your Insurance Claim is Denied

A strong legal advocate can make sure your small business is protected if it has been damaged by large insurance companies or other large organizations.

The problem may be a refusal to pay an insurance claim.

Based on a McKinsey consulting company’s concerted strategy, the insurance industry has been implementing an aggressive “three Ds” approach to avoid paying claims.

They almost always deny the claim. They will do everything possible to delay negotiations. They vigorously defend any legal action.

Background of the Insurance Industry

Based on legal experience and information from adjusters and insurance agents, it is clear that there is some truth to the claims that there is a chapter X in the insurance claims manual. This instructs adjusters how to deny claims.

These movies and books are fiction and were made for entertainment. Many legal professionals have never read or been exposed to a “Chapter X” written for claims denials. However, it is clear that insurance companies have unwritten guidelines for adjusters.

This isn’t a conspiracy theory. It is an explanation of how insurance agents make money and how adjusters earn their raises, promotions and kudos for saving the company money. These adjusters and agents are just trying to look out for their own interests.

To a certain degree, everyone does it. Agents and adjusters are cheating and violating the laws that govern claims handling procedures.


Here’s a list of some of the most common tactics insurance adjusters use to bend things in their favor in insurance claims.

Forgery – You have your signature or initials forged on the papers you signed during the application process. In Texas, when a person purchases autinsurance, the law requires that the insurance company furnish the person with uninsured/underinsured motorist (UM) benefits. This coverage covers you in cases where another driver’s insurance does not cover the damages or the insured person is injured. An insurance company must provide Personal Injury Protection (PIP) benefits. This is coverage for medical bills or lost wages. These twcoverages are automatically available to anyone who purchases Texas autinsurance unless they are rejected in writing.

Typically, the agent will have the applicant sign an insurance application but forget to ask the person to sign the “rejection for UM and/or PIP” coverage. The agent later discovers that the rejection was signed but there is no signature on the application. The agent then forges the signature, or copies and pastes the rejection forms with a copier.

515 Exclusion – Another example of autinsurance is when a husband or wife purchase insurance. A husband may have been convicted of a DWI or received multiple tickets. If he has the policy with his wife, they will be unable to afford the coverage because the rates are too high. They purchase insurance in the name of the wife and sign a “515 exclusion.” This means that the husband can no longer drive the car.

Agents will sign the “515 exclusion”, but they won’t put a name on the form. If a claim is filed, an agent will sign the “515 exclusion” form. However, if the driver (in this case, the wife), is not named in the policy, the agent will fill out the 515 form with the name of the person. This saves the company money.

Fill-in the Blank – A representative will help you fill out an application for auto, homeowners or life insurance. After answering a lot of questions you will write your answers on the application and then sign it. It isn’t obvious that the agent is familiar with the answers to each question in order for you to be eligible for coverage. The agent will likely ignore what you have said, and answer the question in a manner that allows you to be extended coverage. The agent is motivated to close the sale and make a commission. As an agent, the odds of a claim being filed are stacked against them. The agent knows that the odds of you filing a claim are stacked against you. However, the agent or the insurance company can accuse you of lying on your application and use this as grounds to deny your claim.

Improper Denison – Policies often include clauses and paragraphs that aren’t legal or legally enforceable. This subterfuge is often not known by the public, even you. If you file a claim, your insurance company will send you a letter informing you of one or more of these improper clauses or paragraphs. This letter will explain the reason why the company denies your claim.

Do not delay

Delaying tactics are a common tactic used by insurance companies. This is to frustrate you into giving up, dropping your claim, or accepting less compensation than you should in order to get it over with. They want to “wear you out”.

There are many ways to accomplish this. Although they tend to start with a friendly manner, some may choose rudeness. It all starts with the first phone call. You can’t judge if the tone is friendly or irritable.

It is possible to expect to see some or all of the obvious ways that frustrate you.

They will put you on hold for a while in the hope that you will hang up.

You will not receive a return call from them if you make a call.

Transferring your file tdifferent adjusters.

Incorrect claim number information. If the number you use later does not correspond with your case, it can be interpreted as if you have written the wrong claim number.

These tactics will be followed by less obvious ones, those that appear to be trying to manage your situation, but they really aren’t.

Mail Dodgeball – To support a part of your claim, you may be asked to mail a document, typically a bill. If you haven’t heard back from them after you have sent it, they may claim they haven’t received it. You send it again. They then ask for another document. You can replay the previous.

Never-ending Document Requests– They may request another document days or even weeks later. After they verify that they have received the document, they will say, “Thank you for sending it. Now we need …” an application, a report, a statement, and a conversation with a doctor or witness. They continue to wait. They ask for a copy your tax return. This is illegal 95% the time. All of this can be disruptive to your work, your family’s life, your job, and your ability to deal with the loss that is the reason for your claim.

Unnecessary time and expenses – You spend time calling and answering the insurance adjuster, sending certified mail and postage and taking the time to obtain records and copies. This is a tedious process that you’re getting tired of. Worse, even though you know that you are being manipulated, you don’t want to spend the time or money to talk with an attorney about it. This could increase the cost of the entire process. You give up. The insurance company wins when you give up.

The Basic Principle

This is the most important principle to remember: Insurance is a wager. Insurance is nothing but a company with a bigger balance sheet that plays the odds against you…on your life, health, and risk of being injured, storm damaged, stolen, or any other potentially catastrophic loss. Insurance companies are very thorough about how likely they are to actually pay a claim. They can then calculate the amount they can charge you, based on how many claims they will make, and still make money.

They have lost their bet when they make a claim. They don’t like losing their bet. It all comes down to tmoney. They don’t want to lose their bet on insurance.

Insurance companies must follow certain laws in order to handle claims. These laws are well-known to the Humphreys Law Firm, which handles these types of cases against insurance companies every day. Talking to them is free and easy. In most cases, fees are not due until the case has been resolved. The insurance company may require you to pay legal fees or reimburse for any money paid up front.

How to tBeat the Insurance Company Strategy

There are many ways to beat the 3-Ds strategy, and all its tactics and variations. Here are five things to do immediately if your claim is denied.

1. Keep a record of everything. Keep all correspondence, letters and copies of forms, as well as the details of your conversations. Include the dates and names of the people you spoke to.

2. Take a look at the details. Recall the details. Keep all information you can about it.

3. All official records should be kept. If necessary, make copies.

4. Do what is necessary to repair the damage. Continue to do what you need to do if you are required to get medical treatment or repairs for a vehicle or property.

5. Talk to an insurance attorney. This should be your first step. He’ll then tell you the rest. Follow his instructions and listen to what he has to say.

No matter how strong or small your opponent, this proof can help you win…and an experienced lawyer who is willing to fight it out.