If you're wondering if an insurance company can deny a claim, the answer is yes. Filing a car insurance claim isn't always a simple process. Insurance companies can deny claims for many reasons, so it's important to know your options. To rectify the situation, you can review your policy, send documents to support your claim and fight it in court if you believe your claim was denied based on unreasonable grounds.
You'll learn more about that in this article, as well as:
- Why your car insurance claim was denied
- What you can do to resolve the issue
- Tips on filing a car insurance claim
Reasons your car insurance claim was denied
Here are a few common reasons insurers reject claims:
- The driver who caused the collision hasn't paid their monthly premiums. If you miss even one payment, your insurer can cancel your policy.
- You don't understand your policy. A consumer may not fully understand what is covered in their auto insurance policy. Someone may submit a claim for damages that aren't covered, such as an accident that occurs when using a car for business purposes.
- You committed fraud or provided false information during the application process. Your insurance company can deny your claim if you didn't provide accurate information when you applied for insurance.
- You didn't report the incident on time. Don't wait to report a crash. Otherwise, a company may say that they didn't have enough evidence or time to research a claim or they may doubt the accuracy of your claim. If you do get into an accident, you should call the police at the scene of the accident. Insurance companies use police reports as evidence, so it's vital to report an accident in order to determine fault.
- You're an excluded driver. If you (or the at-fault driver) aren't named as an insured driver under the policy, you won't have coverage.
- You made a fraudulent claim. Filing a fraudulent or exaggerated insurance claim is grounds for rejection.
- You have insufficient coverage. When the damages to a vehicle exceed the responsible party's policy limits, the adjuster may deny the claim. If a car accident is your fault, your insurance will only cover the non-negligent driver only if you have liability insurance.
- You didn't get immediate medical attention. Take care of all medical issues as soon as possible. A doctor's visit right after the accident can show your insurance company that the injuries or damages occurred at the same time as the crash. Drivers should also report their injuries to their insurers immediately. Otherwise, they may question if a person's injuries are a result of the accident.
- You were breaking the law. Drivers who get into an accident while drinking or under the influence of drugs can be denied auto insurance claims.
What to do if your car insurance claim is denied
Even when you file a claim with plenty of supporting documentation, it can still be denied. Don't just accept this as the last word.
You can fight back several ways if you believe your claim was denied for no reason:
- Request a letter from your insurer that states why your claim was denied. If your insurer denied the claim for unfair reasons, the letter may serve as strong evidence in a bad-faith lawsuit.
- If you believe the company has made a mistake, be prepared to send photos of the scene of the accident, an eyewitness statement and/or a police report to support your reasoning.
- Contact your state's insurance commissioner or director of insurance. The insurance commissioner protects consumers and makes sure insurance companies follow state laws. A consumer can file a complaint against their insurer through their state's insurance commissioner. To file a complaint, you can go to your state insurance commissioner's website and follow their instructions.
When to seek professional help to fight a denied car insurance claim
You can seek legal help to fight a denied car insurance claim if other options fail. If the at-fault driver has insufficient coverage, you can receive all money available under the other driver's insurance policy, and you can usually sue the driver directly for the remaining amount.
If a driver with no insurance hits you and you don't have uninsured motorist coverage, you have the option to sue the driver depending on the state you live in. In some states with no-pay, no-play laws, you can't sue another driver for certain damages after an accident if they were not insured at the time of the accident. No fault states can also restrict your ability to sue the other driver.
When pursuing a claim that involves a serious injury, it is often advisable to seek an attorney's help. An attorney can help you find out why your claim was denied and try to recover any damages associated with the car accident.
You can also sue your insurance company for bad-faith practices and breach of contract if your claim was denied based on unreasonable grounds. If you decide to sue, there is a time limit for filing lawsuits, which varies from state to state.
Tips for filing a car insurance claim
You can follow certain steps to make the claims process go smoothly and to make sure your claim won't get denied.
After an accident, remember to:
- Exchange contact information, insurance cards, registration and license plate numbers. Also make sure to find out the name of the other person's insurance company and policy numbers.
- Take photos of any damages to both cars and the accident scene.
- Write down the names and contact information of any witnesses.
- Call your insurance company and let them know there was an accident. Record the date, time and place of the collision so you can let your agent know.
- Write down the police officers' names and contact information.
- File a police report as soon as possible. Without a police report, it may be difficult to prove who was at fault in an accident.
- Avoid immediately accepting responsibility for an accident, even if you believe you're to blame. The other driver could have done something to cause the crash that you're not aware of.
- Take advantage of technology. Most major insurers offer apps that make the claims process easier. These apps allow you to upload photos and written documentation.
- Document all communication about your claim. Make note of who you spoke with and when, whether verbally or in writing.
- Consider going to your insurance company's preferred car repair shop. This might speed up the process. But don't repair your car until you have talked to your insurance agency. Your insurer may want to assess the damages themselves first.
- In no-fault states, seek money from your insurer no matter who caused the car accident. Twelve states have no-fault insurance laws.
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