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What To Do When Your Insurance Company Denies A Claim?

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When it comes to any type of accident, you expect your insurance company or that of the responsible party to offer due compensation for your damages. However, it's never guaranteed that an insurance company will respond in a favorable manner. Understanding the steps you can take in light of a denied claim can help you receive the compensation you deserve.

Reasons for Denial

There are plenty of reasons why a typical entry claim may be denied by a claims adjuster. Lack the coverage is usually one of the most common reasons for denied claim, particularly for the following:

  • The person responsible for the accident is not covered
  • The circumstances surrounding the accident or its location are not covered
  • The policy itself has lapsed for either non-renewal or non-payment
  • The insurance company did not receive the claim in a timely manner

If a negotiation for a settlement is ongoing, a denied claim won't put the brakes on those proceedings. Instead, it'll likely end up one more consideration in the negotiation process.

What You Can Do

An insurance claim denial can seem like an insurmountable roadblock. However, there are many ways you can get around this and press on with your claim:

  • Ask for a written explanation – If the insurer claims there is no coverage, ask for an explanation of the adjuster's assessment in writing and references to the policy provisions governing coverage limitations and exclusions. This way, you can find out whether or not the adjuster is telling the truth.
  • Send a letter – If you can't get a written explanation from the adjuster, sending a letter explaining their refusal to provide one can get the ball rolling in your favor. The last thing a claims supervisor wants is having this type of letter in the insurance company's records, as it alludes to the insurer's non-cooperation in the claims process. This could prove helpful in the event that you choose to take your claim to the next step through a lawsuit or report the company to your state's insurance commission.
  • Get a copy of the policy – Having a copy of the responsible party's insurance policy on hand can be a powerful piece of leverage when it comes to a denied claim. You can read the policy for yourself (or have a skilled attorney look it over) to see whether or not the insurer's provisions for a claim denial are valid. If the adjuster refuses to give you a copy upon request, you can write a letter to the adjuster or contact the insurance commission (as mentioned in the above step).

In some cases, an adjuster may send you a letter from the insurance company's own attorneys citing one or more of the above reasons for a lack of coverage and subsequent denial. The most important thing to remember is to not be shaken or swayed by this action. Receiving a letter of this sort from a legal party doesn't render their decision in stone. You still have an opportunity to pursue further action and the details of the matter will be resolved in the courts.

When Insurance Companies Deal in Bad Faith

While most insurance companies deal with their customers in fair and honest terms, it's not uncommon for a company to behave in bad faith. Claims can be deliberately delayed for whatever reason or the insurance company can fail to perform due diligence during their investigation of your claim. Even if compensation is approved, it's possible for payments to be slowed significantly or stalled.

If you believe that the insurance company is acting in bad faith, you have the opportunity to pursue further action through a wrongful denial lawsuit. Having personal injury attorneys involved in your case can improve the likelihood of a successful resolution and subsequent compensation.