When filing a car insurance claim, policyholders may be counting on the insurance settlement from that claim in order to pay for their car repairs and/or medical bills that resulted from the accident. However, insurance claims are not always approved by insurance companies. Denied claims may be stressful but policyholders need to remain calm and handle the situation rationally. A letter of denial does not mean a policyholder is out of options.
What to do after an accident
Policyholders can avoid denied insurance claims. The most important step is to call emergency responders to the scene of an accident. When police officers arrive on the scene, they will file a police report with unbiased information. If the accident is minor and the police are not sent to the scene, collect the other party’s personal and insurance information. You can take this information and file a police report with it on your own at a local station.
You must call your insurance company to report an accident. This is the case even if you are not at fault. When you call your insurance company they will ask you a few questions. Specifically, they will ask for the date, time and who was driving. The insurance provider will ask how fast you were going, what direction and who caused the crash. The insurance provider will also ask about property damage and bodily injuries. This is where a police report comes in handy. The report has all of this valuable information for the insurance company.
Common denied claim reasons
Any insurance provider that denies a claim must include the reason why the claim was rejected. Common reasons include:
- Disputed Liability: With disputed liability, the insurance provider is claiming their policyholder was not at fault for the accident or they did not cause the damages listed on the claim.
- Lapsed Policy: If a driver’s car insurance policy lapsed for nonpayment and there was no coverage at the time of the accident, the insurance provider is not responsible for any damages.
- Failure to Notify: Policyholders must report an accident to the insurance company within a reasonable amount of time.
- Policy Exclusions: If there were any excluded events or excluded drivers, the insurance provider can exclude your claim if the accident was due to excluded people or events.
You have the right to appeal a denial. It may be in your best interest to hire an attorney to represent you. Lawyers can explain why your claim is legitimate and negotiate a settlement. If the insurance company acted in bad faith, you may also sue them. Acting in bad faith means that the insurance provider is not fulfilling its obligations to resolve your case as it is legally bound to do per your insurance contract.