What Are My Legal Options if My Car Accident Claim was Denied?

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We buy car insurance hoping we never need to go through the process of submitting a claim. When life and accidents happen, we hope the recovery process is smooth and simple. Hoping to submit a claim, pay the deductible, and move on with our lives. However, it may not be that straightforward. If you’ve recently been in a car accident, you may be counting on the money from the insurance claim to pay medical and other bills. Unfortunately, there are several reasons that your claim may be denied. This denial can often cause a significant financial strain on you and your family. The first and most important step in resolving your denied claim is understanding what has caused your claim to be denied. 

The Most Common Reasons for a Claim to be Denied

If you’ve recently been in an accident, the last thing you wanted to see was a denial of your claim. Often insurance companies have a legitimate reason for denying claims.  While having your claim denied may be frustrating, knowing why your claim was denied can help lead to resolution. When your insurance claim is denied, the insurance company must give you a valid reason for denial. The most common reasons for denial typically are:

  • Policy Coverage – In this instance, your insurance policy may not provide coverage for your type of claim. In some cases, for example, your accident may fall under collision coverage rather than liability coverage. On the other hand, insurance policies usually include a laundry list of items that aren’t covered. In that example the company may use an exclusion to claim your accident wasn’t covered by your policy.
  • Lapsed Coverage – In this case, it may be that the insurance premium was not paid at the time of the accident. Therefore, the insurance company may claim that there was a lapse in coverage, and at the time of the accident, no coverage existed.
  • Disputed Liability – The insurance company in this case is disputing that their policyholder did not cause the accident or that accident did not cause your injuries, and therefore is not required based on your policy to accept the claim. 
  • Failure to Notify – As a policyholder, you must timely notify your insurance company of your accident. Failure to do so may result in the insurance company claiming they did not have an opportunity to investigate the claim.
  • Violating the Law – Under certain insurance policies,your insurance company can deny your claim if you are found in violation of the lawwhen the accident happened.
  • Violating Insurance Policy – Likewise, if you misrepresent information when purchasing your insurance, such as the purpose or use of your car, your claim can be denied.
  • Avoidable Accident – If the insurance company believes that you did something during the accident that would cause the policy coverage to be ineffective, your claim may be denied. Also, if you could have avoided the accident or it happened by an error you caused, you may have your insurance claim denied as well.

When a Denied Claim May Be in Bad Faith

If none of these common reasons for denial apply to your case, then the insurance company may be acting in bad faith. When you are purchasing car insurance, the policy becomes a contract. The insurance company agrees to pay claims unless one of the policy exclusions or common reasons for denial applies, and you agree to pay the monthly premium. Under traditional contract law, parties to a contract must act in good faith. Simply stated this means that each party is honest and does their best to deal fairly. Meaning, that if an insurance company denies your claim, it has to have a valid reason for denial. If the company knows its policyholder is at fault and no exclusions apply, and a claim is denied anyway, the company may be acting in bad faith. If you believe that this is what has happened to you, you may be able to sue your insurance company. Personal injury law pertaining to car accidents can be a lengthy and complicated process. To receive the best results contacting an experienced auto accident attorney can help resolve your claims.

Appealing Your Denied Car Insurance Claim

If you were in a car accident and you were counting on the money from the insurance claim to pay medical and other bills, a denied claim may feel like the end of the world. However, generally, that’s not always the case. If your car insurance claim was denied you’ll likely have legal options for resolving it. Typically, the most beneficial legal options for resolution are:  

  • Discuss the Denial With Your Insurance Company – Commonly, as part of the denied claim, the insurance company will provide instructions on how to appeal. Writing a letter or calling the insurance company to discuss the denial is a good first option in the appeals process. Starting here allows the opportunity to quickly gain more information regarding your denial. In this instance, you will likely have to provide the insurance company with documentation to support your dispute of their decision. Including the most specific and relevant information will help support your claim. Even starting by contacting the insurance company can be a tricky situation. Contacting an experienced personal injury lawyer can help ease and expedite the process for you and your family.
  • Filing a Bad Faith Claim Against the Insurance Company – As discussed, if the insurance company knows its policyholder is at fault and no exclusions apply, and a claim is denied anyway, the company may be acting in bad faith. If you believe that this is what has happened to you, you may be able to sue your insurance company. This instance certainly requires the help of a car accident or personal injury lawyer to determine the chance of success. If you have a well-supported case your chances are higher, that the insurance company will reverse their decision. If they don’t settle a claim promptly or deny it without good reason, they could violate state laws and be acting in bad faith. This will likely increase your chances of success.
  • Filing a Lawsuit Against the Other Party If none of the other appeals are successful, filing a lawsuit against the other party in the accident can be an extremely beneficial alternative coarse of action. Generally, you will not have to go through a trial. Getting in touch with an experienced attorney can help build your case. Doing so will most likely allow you to settle outside of court if the opposing party was at fault.

While denial of a car insurance claim can feel like a major setback, knowing the steps to move forward is critical to your success. Once the frustration subsides, discover why your claim was denied, gather all the relevant information, get familiar with your case, and get in contact with an experienced attorney. Following these steps will help you and your family move forward in the best possible way.