Appealing Auto Insurance Decisions: Your Rights

If your car insurance claim has been denied, you can appeal the decision. Understanding the reason for the denial is crucial before taking any further steps. Denials often occur due to stipulations in your policy that you may not be aware of. For example, your claim may be denied if the event does not meet the definition of a covered loss, there has been a violation of your contract, or your insurer suspects fraud.

If you think your car insurance claim has been unfairly denied, you can submit an appeal letter to your insurer, outlining your reasons for the appeal and including any supporting evidence. You may also want to consider hiring a lawyer to help with your appeal.

Understanding your claim denial letter

Receiving a claim denial letter from your insurance company can be frustrating and stressful. However, understanding the reasons behind the denial is crucial before taking any further steps. Here are some important things to know about claim denial letters and the appeals process:

Understanding the Denial

First, it is essential to carefully read and understand the reason for the denial. Claim denial letters should outline the specific reasons why your insurance company has decided not to cover your damages. Common reasons for claim denials include:

• Excluded purposes: If you were using your vehicle for purposes excluded from your policy, such as ride-hailing work, your insurer may deny the claim.
• Contract violations: Insurers provide coverage procedures and information in your policy. Deviating from these procedures may result in a claim denial.
• Suspected fraud: Insurers may deny a claim if they suspect fraud or if your explanation of the incident doesn't align with the adjuster's findings.
• Excluded drivers: If a driver who was previously excluded from your policy causes an accident, the resulting claim may be denied.
• Policy limits: If your damages exceed your coverage limits, your insurer may deny the claim. In this case, you may be responsible for paying the difference.

Appealing the Decision

If you believe your claim has been unfairly denied, you have the right to appeal the decision. Most insurance companies have an internal appeal process, and you can start by notifying your insurance agent or representative. Here are some steps to take when appealing a claim denial:

• Submit a letter of appeal: Write a letter to your insurance company stating your reason for the appeal and include any supporting evidence.
• Document evidence: Keep all documents related to the incident, such as accident photos, police reports, and medical information, safely filed.
• Seek legal counsel: If needed, hire a lawyer to help you navigate the appeal process and improve your chances of a successful appeal.
• Follow up: Don't hesitate to follow up with your insurance company to inquire about the status of your appeal.

It's important to note that successfully overturning a claim denial can be challenging. However, if you have strong supporting evidence, you should not hesitate to appeal the decision. Understanding your policy, staying organised, and seeking help when needed will improve your chances of a successful appeal.

Reasons for denial: lapsed insurance policy

A lapsed insurance policy is one of the most common reasons for insurance coverage to be denied. This usually occurs when the policyholder fails to pay their premiums, and the account value of the insurance policy has been exhausted. However, a policy does not lapse every time a premium payment is missed.

Grace Period Still Applicable

Your insurance policy will usually have a grace period that covers you if you miss a premium payment. This grace period varies depending on the insurance plan but is generally around two to three months. If you miss a payment, and the grace period passes without you paying the outstanding premiums, your policy will be considered lapsed from the date of the original missed payment. For example, if you miss your March 1 payment and don't pay before the end of the grace period on June 1, your coverage will have lapsed on March 1. If you were in an accident in April, you would not be entitled to receive benefits.

Payments Were Actually Made

In some cases, your insurance claim may have been denied due to administrative or procedural errors on the insurer's part. If you are certain that you made your premium payment on time, consult a qualified attorney who can investigate the matter further. The insurer may have failed to keep their records updated, and the issue could be a simple misunderstanding.

Inadequate or Improper Notification of Lapse

In many states, including Florida and California, there are laws requiring insurers to provide proper notice of an impending lapse in coverage. This usually involves mailing a notice to the policyholder's primary and secondary addresses. If your insurer did not send you proper notice or sent the notice to the wrong address, you may be able to avoid the lapse altogether.

Reinstatement After Lapse

If your policy has lapsed due to non-payment of premiums, you may be able to reinstate it without obtaining a new policy. Most insurance companies offer policyholders the option to reinstate their policy within a certain period, typically between two and five years. Reinstatement allows you to get the same policy for the same price without going through the entire application process again. However, you will need to submit a reinstatement application and a health questionnaire, and the insurer may require a medical exam. You will also need to pay any premiums that went unpaid before the lapse, usually with interest.

Gather evidence and draft an appeal letter

Gathering evidence and drafting an appeal letter are crucial steps in the process of disputing an auto insurance claim decision. Here are some detailed instructions to guide you through this process:

Gather Evidence:

• Obtain physical and digital copies of relevant documents: Collect all documents related to your claim, such as accident reports, repair invoices, medical bills, and police reports. These documents will support your claim and help you build a strong case.
• Collect visual evidence: Take photos of any property damage and injuries resulting from the accident. Visual evidence can be powerful in substantiating your claim and providing a clear representation of the incident.
• Gather eyewitness testimonies: Statements from individuals who witnessed the accident can strengthen your case. Contact anyone who may have seen the incident and ask for their account of what occurred.
• Obtain medical reports: If you or anyone else involved in the accident sustained injuries, obtain detailed medical reports from healthcare providers. These reports should include information on the extent of the injuries, treatments provided, and any associated costs.

Draft an Appeal Letter:

• Address the letter to the insurance company: Begin your letter by addressing it to the insurance company's claims department or the specific claims adjuster handling your case. Include the date, your full name, policy number, and claim number.
• Clearly state your reason for appealing: In the body of the letter, clearly and concisely explain why you are disputing the insurance company's decision. Refer to specific points from the denial or settlement offer letter that you believe are incorrect or unfair.
• Present your evidence: Summarise the evidence you have gathered and explain how it supports your appeal. For example, if you have eyewitness testimonies, mention the number of witnesses and the key points of their statements. If you have medical reports, summarise the extent of the injuries described and how they impact your claim.
• Be concise and factual: Avoid including unnecessary details or emotional language in your letter. Stick to the facts of the case and present your information clearly and concisely.
• Include a call to action: Clearly state what you want the insurance company to do after receiving your appeal letter. For example, you may request that they reconsider their decision or provide a more appropriate settlement offer.
• Proofread and sign the letter: Before sending the letter, carefully proofread it for any errors or typos. Make sure the information you have provided is accurate and truthful. Sign and date the letter to finalise it.

Remember, each state may have different statutes of limitations for disputing insurance claims, so it is important to act promptly. Additionally, consider seeking legal advice or consulting with an attorney to ensure you are taking the most appropriate course of action.

Consider hiring an attorney

If you've received a decision from your auto insurance company that you're unhappy with, you can consider hiring an attorney to help you appeal. It can be a complicated process to navigate on your own, and an experienced lawyer will be able to advise you on the best course of action and give you a better chance of a successful outcome.

An attorney can help you understand the reasons for the denial and advise on your options for appealing. They can also help you gather the necessary evidence to support your case, such as eyewitness reports, photographs, medical records, and police reports. This evidence will be crucial in building a strong case to show that the insurance company's decision was incorrect.

In addition, an attorney can communicate and negotiate with the insurance company on your behalf, ensuring that your rights are protected and that you don't inadvertently say something that could hinder your case. They can also review the insurance company's internal appeal process and help you submit a strong, well-supported request.

If the internal appeal is unsuccessful, an attorney can advise you on further steps, such as filing a complaint with a state insurance department or pursuing legal action if the insurance company has acted in bad faith.

It's important to act quickly if you're considering appealing an auto insurance decision, as there may be time limits for filing an appeal. Consulting with an attorney as soon as possible will give you the best chance of a successful outcome.

Filing a complaint with the state insurance department

If you are dissatisfied with the actions of your insurance company or insurance agent, you can file a complaint with your state department of insurance (DOI). Delays, denials, and unsatisfactory settlements are among the most common reasons for consumers to file complaints.

Step 1: Understand the reasons for your claim denial

Before taking any next steps, it is important to understand the reason for the denial of your auto insurance claim. The denial may be due to stipulations in your policy that you were not aware of. Understanding the reason for the denial will help you navigate the situation and prepare your next steps effectively.

Step 2: Contact your insurance broker, agent, or claim representative

Speak with your insurance broker, agent, or the representative assigned to your claim. They can guide you through the details of your claim, the denial, and the restrictions outlined in your insurance policy. This conversation will help you identify if there are any valid grounds for an appeal.

Step 3: Initiate the appeal process

Most insurance carriers have an internal appeal process for policyholders to contest decisions they believe were wrong or unfair. Contact your insurer or agent directly to request information about their specific appeal process. Typically, this involves submitting a letter stating your reason for the appeal and providing any supporting evidence you have.

Step 4: Gather supporting evidence and documentation

Collect and safely file all documents related to the accident, including photos from the scene, police reports, and medical information. Additionally, gather supporting documents and photographs, such as email correspondence and a log of phone calls with your insurance agent or company. This evidence will strengthen your case when filing a complaint.

Step 5: File a complaint with the state insurance department

If your appeal is denied, you can proceed to file a formal complaint with your state insurance department. Visit https://content.naic.org/consumer.htm to select your state and navigate to its consumer complaint page. Be prepared to fill out a form, either paper or online, providing information such as your name, address, type of insurance, and the reason for your complaint.

Your state's Department of Insurance takes complaints seriously and is prepared to assist you in resolving the issue. By following these steps, you can effectively navigate the process of appealing an auto insurance decision and, if necessary, filing a complaint with the state insurance department.

Frequently asked questions