Auto Insurance Claim Denied: Your Steps

If your auto insurance claim has been denied, it's important to understand the reason for the denial before taking any further steps. The denial may be something you can appeal, but it's often due to stipulations in your policy that you weren't aware of. Understanding your claim denial letter is the first step in determining the validity of a denied car insurance claim.

Some common reasons for claim denial include lapsed insurance policies, failure to pay premiums, accidents involving uninsured motorists, and accidents that occur outside of the country. If you receive a denial letter, read it carefully as it will typically include supporting evidence for the decision.

If you do not agree with your insurer's claim denial, you have the right to appeal the insurance company's decision. If your insurance denies a claim, the reason for the denial will influence how you should go about the appeals process.

Understand the denial letter and gather evidence

Understanding the denial letter is the first step in determining the validity of a denied car insurance claim. The letter will include the reasons for the denial, which typically fall into one of two categories: either the insurer's claims adjuster believes your claim lacks merit, or the insurer hopes you won't pursue the claims process further.

• The person bringing a first-party claim isn't covered under the car insurance policy.
• The vehicle wasn't listed on the car insurance policy.
• There was no policy in effect at the time of the accident.
• The claim exceeds coverage limits.
• The insurance company's investigation concluded that the accident isn't covered.
• The claimant was driving without a license or was intoxicated.
• The claimant's injuries were pre-existing, or the claimed vehicle damage was unrelated to the accident.
• The insured failed to promptly report the accident.
• The insured lied to the insurance company when applying for coverage or during the claim process.
• Exclusions in the policy, such as "acts of God" or natural events.
• The policy has lapsed due to failure to pay premiums.
• Failure to notify the insurer in time, as dictated by the policy.

Once you have received the denial letter, you can start gathering evidence to support your appeal. This could include:

• Police reports.
• Eyewitness statements and information.
• Photographs of the accident, repair estimates, or medical records and bills.
• Accident documentation.
• Recent photos of the car before the damage.
• Related repair records.

Submit a claims appeal letter

If your auto insurance claim has been denied, you can submit a claims appeal letter. Here are some steps to help you with the process:

Understand the denial reason

Before you start the appeals process, it is important to understand the reason for the rejection. Review the denial letter from your insurance company carefully. The reason for the denial will be stated clearly in most cases. If not, you can call the insurance company and ask for clarification. Knowing the reason for the denial will help you plan your next steps and gather the necessary evidence to support your appeal.

Gather evidence

To support your appeal, you will need to gather relevant evidence. This could include police reports, eyewitness statements, photographs, medical records, repair estimates, and other supporting documentation. Make copies of everything to provide to the insurance company so that you can keep the originals. Having strong evidence is crucial to the success of your appeal.

Draft an appeal letter

The appeal letter is a formal request to the insurance company to reconsider their decision. In your letter, explain clearly and in detail why you believe your claim should have been accepted. Reference any supporting evidence you have gathered and include it with your letter. Provide specific information and explain how it relates to your appeal. You can also reference your insurance policy and the claims denial letter in your letter. Be sure to follow any instructions or guidelines provided by the insurance company regarding the appeals process.

Consider hiring an attorney

If you feel overwhelmed by the process or want expert guidance, consider hiring an attorney. An experienced attorney can review your case and supporting documents to draft a compelling demand letter to the insurance company. While hiring an attorney may incur upfront costs, it could be worthwhile if it leads to a successful appeal and you receive the compensation you deserve.

Remember, receiving a claim denial does not necessarily mean the end of the road. You have the right to appeal the insurance company's decision and fight for your rights. Stay persistent and don't be afraid to seek help if needed.

Hire an auto accident attorney

If your car insurance claim is denied, you may want to hire an auto accident attorney to help you fight the denial. An auto accident attorney can help you recover monetary losses and get reimbursed for any medical expenses incurred due to the accident. They are experts at understanding nuances in state law and can use their knowledge to get you maximised compensation.

• Schedule free consultations with several auto accident attorneys to find the one you are comfortable with. Chances are you will be communicating with this person and their office staff for several months while your case is proceeding. Therefore, it is important to ensure that your auto accident attorney is professional, prompt, and has your best interest in mind.
• Discuss upfront or out-of-pocket fees. Many personal injury attorneys do not charge a fee unless the case is won. While some lawyers may require you to make a payment before the case is opened, you should be able to find someone who will take on your case without requiring an out-of-pocket expense. If you win the case, your attorney will then collect a percentage of the settlement money as their service fee.
• Ask for a service contract that explicitly states the percentage of the settlement that the attorney will retain as their fee. Ensure that you are aware of this amount before hiring the attorney and keep a copy of the contract for your personal records.
• Bring all relevant information about the car accident to your initial meeting with the attorney. This includes your automobile insurance policy, medical insurance policy, any medical records or hospital bills resulting from the accident, pictures of the vehicle after the wreck, a copy of the police report, and contact information of the other parties involved. This information will help your attorney build your case in a timely manner and get your benefits to you quicker.
• Be communicative, available, and professional. Maintain all appointments with your lawyer, keep all your documents organised, and respond to any letters or phone calls you receive from your attorney's office. If you are required to appear in court, follow your lawyer's instructions, dress appropriately, and be respectful to the judge.

File a complaint with your state's insurance department

If you've exhausted all other options and still feel that your auto insurance claim has been unfairly denied, you can file a complaint with your state's insurance department. This is a viable option if you believe that the insurance company has acted in bad faith.

Auto insurance is regulated at the state level, and many states have a special unit to deal with policyholder issues. For example, California has the Department of Insurance's Automobile Claims Mediation Program, which will help you negotiate a disputed claim with your auto insurance company under many circumstances. Each state has different procedures for filing complaints, so be sure to ask about the correct process.

The insurance department will investigate your claim and determine if the denial was justified. If they find that it wasn't, they may order the insurance company to pay your claim. This can be a helpful step before considering legal action, which can be costly and time-consuming.

If your claim is related to a third-party claim, you may have fewer legal options, as there is no contract between you and the insurance company. In this case, it may be worth consulting a lawyer to help you navigate the process and improve your chances of a successful outcome.

Understand the reason for denial

Understanding the reason for the denial of your auto insurance claim is crucial before deciding on your next steps. The insurance company is legally obligated to send you a formal letter stating the factors that led to the denial of your claim. This letter will help you determine the validity of the denial and plan your course of action. Here are some common reasons why auto insurance claims are denied:

Lapsed Insurance Policy

If you fail to pay your insurance premium on time, your coverage may lapse, meaning you don't have an active policy to file a claim against. Paying your premiums on time is essential to ensure your coverage is in force when you need to file a claim.

Insufficient Coverage

When the damages exceed the policy limits or if you lack the necessary coverage, your claim may be denied. For example, if you don't have collision coverage, your insurer won't pay for repairs to your car after an accident. Reviewing your policy and choosing the appropriate coverage types and limits are crucial to avoiding this issue.

Accident Involving an Uninsured Motorist

If you are involved in an accident with an uninsured or underinsured motorist, your claim may be denied if you don't have uninsured or underinsured motorist coverage. While most states require liability coverage, not all mandate uninsured motorist protection.

Violation of State Law

Insurance companies may deny your claim if you were violating any state driving laws at the time of the accident. This includes driving without a valid license, driving without insurance, or driving while intoxicated.

Miscellaneous Reasons

In some cases, your claim may be denied due to circumstantial evidence or doubt surrounding the incident. For example, if you didn't report the accident immediately or failed to seek prompt medical attention, the insurer may question the legitimacy of your claim.

It is important to carefully review the denial letter and understand the specific reasons for the denial. Once you have identified the issue, you can decide whether to appeal the decision or take other appropriate actions.

Frequently asked questions