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. When car insurance claims are denied, policyholders need to remain calm and handle the situation rationally. A letter of denial does not mean that there is nothing to be done.
Let’s begin by exploring why your claim may have been denied in the first place.
Common reasons claims are denied
The insurance provider that denied a claim must include the reason why the claim was denied. 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 or risk being denied for failure to notify.
- Policy Exclusions: If there were any excluded events or excluded drivers, the insurance provider can exclude your claim if the accident was caused by excluded people or events.
How to appeal a denial
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 should be paid 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.