What to Do When Your Car Insurance Claim is Denied

Just because your car insurance claim is denied after an accident does not mean you abandon your claim and end negotiations with the insurance company. You still have options to pursue the insurance money that you need to pay for your damages and injuries. So, what happens if car insurance denies your claim?

Your first step is to review your claim denial letter, understand why would a car insurance claim be denied, and submit an argument against the denial. The process of appealing an insurance claim denial can be handled without a lawyer, but an insurance attorney can be a valuable asset if the insurance company is particularly resistant to paying the claim.

TIP:  If you suffered serious or permanent injuries or extensive damage, or are uncomfortable negotiating your denial, contact an attorney who has experience in auto claims matters.

If you still don’t know what to do if your car insurance claim is denied, don’t hesitate to ask for insurance help. Just enter your ZIP code below.

A car insurance denial can be costly, frustrating, and disappointing. If your auto insurance claim was denied, take careful note of the reason given in the insurance denial letter. Make sure your car insurance denial is appropriate! Car insurance companies can make mistakes, and you could covered under your policy despite your insurance company saying that you are not.

TIP:Insurance companies save money by denying claims. This does not mean they are dishonest, but it does mean that when in doubt they will deny your car insurance. You do not have to accept a car insurance denial as a final judgment, and the stated reasons for not paying can be challenged. You may find the insurance denial is not supported by the facts of the claim.

Why Your Insurance Claim Was Denied

It is critical that you understand the reason your insurance claim was denied. If you know why your insurance claim was denied, then you can properly determine if you have reason to dispute the decision. There are several reasons company’s deny car insurance claims, and the following are common examples:

• No coverage on your car insurance policy for the claim presented. For example, if you drive an older vehicle, you may carry only liability insurance and have no collision coverage. In this example, your car insurance is denied correctly.
• You made an Uninsured Motorist Claim under your policy and it turns out the other party to the accident was insured.
• You do not qualify as a named insured under the policy. For example, if you are a teenager and you are specifically excluded under your parents’ policy because your parents do not expect you to drive their vehicle.
• Your coverage has lapsed because you failed to pay your premium before the end of the grace period.
• The amount of damage claimed exceeds your policy limits on your declarations page and the insurance company will not cover the excess.
• You bought a new car and failed to notify the insurance company to add it to the policy within the specified time given in the policy.

If you still believe your insurance claim was denied incorrectly after reading the insurance company’s reasons and reviewing your policy, there are some steps you may take to try to appeal a denied insurance claim. You have certain rights under your policy and under state law. Your insurance company has a duty to fairly and promptly negotiate to settle your car accident insurance claim in good faith.

Appealing a Car Insurance Claim Denial

Car insurance companies typically have a process in place for you to appeal the claim denial, and you can ask your insurance agent or adjuster what steps you need to take to formally dispute the company’s decision. If you decide to appeal an insurance claim denial on your own, you can do so by following a few simple steps:

1. Understand why the company denied your accident claim
2. Review all the evidence you submitted with the claim
3. Write a letter that articulates why the evidence you gathered contradicts the insurance company’s decision.  Include copies of the evidence (for example,  photographs, eyewitness reports, medical records, police report, diagnostic tests,  physical therapy, medications, ), and be sure to connect each piece of evidence to your argument against the adjuster’s decision
4. Contact an attorney if you are uncomfortable with disputing the claim on your own.

Insurance companies will not simply reverse the decision to deny a car accident claim because you appeal, but are willing to work with you if your argument makes sense and is well supported by the evidence.  If you have been seriously injured or suffered permanent injury or have significant property damage, you might consider consulting with an attorney before entering into negotiations with the insurance carrier.

NOTE:  Appealing a car insurance claim denial is not always successful, but you may still pursue the money you need by filing a lawsuit against the other party if s/he was responsible for the accident.  An attorney can determine whether there are significant assets held by the other party that can be claimed.

Bad Faith Insurance Claims: How to Dispute a Wrongful Insurance Denial

If the stated reason your car insurance was denied do not reflect the actual facts of your claim, you have a right to dispute the decision. If you elect to dispute the claim denial, consider the following action:

• Write the insurance company to tell them where their mistake is and provide them with documentation to support your response. Ideally they will negotiate with you and give you a fair settlement.
• Appeal the company’s decision to the State Insurance Commissioner.
• You have the option to file suit against the company for bad faith insurance practices, breach of contract, and/or violations of your state’s insurance code. If you decide to pursue this option, you should hire an insurance bad faith attorney to handle the legal process.

If, after you either take or threaten action under an insurance bad faith claim, the insurance company may reopen your claim and move forward with their investigation. If the company holds firm, and you suspect you are being bullied, then you may be able to move forward with a bad faith insurance lawsuit.

How to Write a Formal Complaint Letter

Follow the tips below to write your letter of complaint to the insurance company:

• Put the date on the letter
• Give your name and policy number
• Mark the letter ‘complaint’ clearly at the top
• Include any evidence you have to support your complaint
• Say what you would like the company to do to put things right
• State why you think your car insurance claim should not have been denied

TIP:Your insurance company is required to act in good faith when handling your car accident claim. If the insurance company unnecessarily denies your claim or fails to promptly settle it, they could be in violation for acting in bad faith, breach of contract, and violations of your state’s insurance code. Click here to contact an auto accident attorney who is experienced in insurance coverage litigation if you believe your insurance company is not handling your claim fairly.

If your auto accident claim is being handled with the insurance company for the other driver, a failure to settle promptly or fairly is not a denial of the insurance claim. You should think about contacting an attorney to either negotiate a settlement for you or to file suit against the responsible driver.

In the end, when the claim has been resolved you maybe be left with the feeling that you were not given the customer service that you deserve— from either your agent or your insurance company. If you are unhappy with the service you received, look into changing companies and begin shopping for new car insurance. Click here to visit the Free Advice quote center and get a quote on your insurance today!

For more information about auto insurance claims, check out the following articles:

Get a FREE Case Evaluation From An Experienced Auto Accident Attorney.

Car Insurance Claim Process

What Is Your Car Insurance Claim Worth?

Negotiating Your Car Accident Insurance Settlement

Settling Your Car Insurance Claim & Demand Letters

How To Write A Demand Letter

How To Know When Your Car Insurance Settlement Offer Is Too Low

What To Do When Your Car Insurance Claim Is Denied

What To Know About Your Car Insurance Settlement Agreement

Should I Contact a Car Accident Attorney?

More Articles That Help You File A Car Insurance Claim

Case Studies: What to Do When Your Car Insurance Claim is Denied

Case Study 1: The Unjust Denial

John, a responsible driver, filed a claim with his car insurance company after a collision. To his surprise, the insurance company denied his claim, citing a lack of evidence. However, John was confident that he had provided all the necessary documentation. Frustrated with the denial, he decided to take action.

After thoroughly reviewing his policy and gathering additional evidence to support his claim, John sent a formal letter to his insurance company, disputing their decision. He highlighted the discrepancies between their denial and the facts of his case. In response, the insurance company reopened his claim for further investigation. Ultimately, they reversed their decision and settled the claim in John’s favor.

Case Study 2: The Deliberate Delay

Sarah was involved in a car accident caused by another driver’s negligence. She promptly filed a claim with the at-fault driver’s insurance company, expecting a fair settlement. However, the insurance company intentionally delayed the process, avoiding a prompt resolution. Recognizing that she was being treated unfairly, Sarah sought legal advice and hired an attorney who specialized in insurance coverage litigation.

Her attorney took swift action by sending a demand letter to the insurance company, emphasizing their violation of acting in bad faith and breach of contract. Faced with the possibility of a bad faith insurance lawsuit, the insurance company reevaluated their position. They settled Sarah’s claim promptly, ensuring she received the compensation she deserved.

Case Study 3: Seeking Alternative Options

Michael had been a loyal customer of his car insurance company for many years. When he filed a claim following an accident, he expected a smooth process. However, the insurance company provided poor customer service, mishandling his claim and failing to settle it promptly.

Disappointed with his experience, Michael decided it was time for a change. He researched other insurance companies and obtained quotes to compare rates and coverage. After careful consideration, he switched to a new insurance provider that offered better customer service and a more responsive claims process.