The fact that the person who rear-ended you was driving without insurance didn’t surprise you. You’re aware that there are motorists on the road who lack proper insurance.
You weren’t really concerned about the implications of it, either. Remember that you are a safe driver with good vehicle insurance from a reliable company. The fact that the motorist who hit you was uninsured shouldn’t change anything.
Before your insurance company rejected your claim, at least. You’ve lost many thousand dollars on repairs, and there’s no way to get that money back. It will be months before your finances are back to normal, and that’s providing nothing else bad happens in the interim.
What Should You Do If Your Auto Insurance Claim Is Denied?
It is conceivable, but not guaranteed, that your motor insurance provider would alter its decision to reject your claim.
The specifics of your policy, the reasoning behind the rejection, and the persuasiveness of your appeal will all impact how likely you are to succeed. The strength of your case might be improved if you involve a third party, such as an insurance attorney or the insurance commission in your state; but, this assistance may come at a cost to you.
To assess your claim denial, develop a plan of action, and seek an appeal, if desired, please refer to the following guidelines.
- Discover the Most Common Reasons for Insurance Claim Denial
Gather as much information as you can first. Several factors might lead to a claim being denied by an auto insurer. In order to take corrective action, you need to know why the insurance company declined your claim.
Your Insurance Policy Is No Longer Active
You will lose insurance protection if you let your premium payments fall behind. Your insurance company is within its rights to refuse payment if you file a claim for damages that occurred before your policy was reinstated or a new one was purchased.
Your Claim Exceeds the Coverage Amount
Your insurance provider may reject all or part of your claim if you are involved in a major accident and do not have sufficient coverage.
As an illustration, if you cause an accident that results in $50,000 in property damage but your liability insurance policy only covers $25,000, you will be responsible for the remaining $25,000.
That’s not to say you have to shell out $25,000 all at once. In the event that the person who suffered the loss files a lawsuit against you, your insurance carrier will not cover the costs of a judgment against you.
Your claim is completely uninsured.
The specifics of your insurance policy and the coverage it provides will determine whether or not your claim will be paid. You would expect a loss caused by colliding with an object, such a tree, to be covered by collision insurance. However, collision insurance is not required by law and is thus likely not included in your policy if you are looking to keep costs down.
The driver is expressly excluded from coverage.
Both collision and comprehensive coverages in auto insurance contracts are meant to protect the vehicle, not the driver. If additional family members frequently use your automobile, this is a positive feature to have.
Is there anything you can do if your 18-year-old son, for example, is too reckless to be trusted with the keys to your car? If you take them off of your insurance coverage, you may save a lot of money.
This is great until your brilliant son decides to take your car for a joyride with his pals and then everything goes downhill from there. You can count on hearing a resounding “bad luck” from your insurance if your joyride ends in a ditch.
Fraud is suspected by the insurance company.
The insurance claims adjuster assigned to your case will not approve your claim if they suspect that you are not being honest or that your claim is a complete fiction. It is possible to face criminal charges for insurance fraud, although your insurer is more likely to just reject your claim in such cases.
The Driver Was Driving Illegally
Your insurance provider has the right to reject your claim if the individual who was driving your automobile was engaged in any illegal activity. What I mean by that is, and is not limited to:
- Driving your automobile without your permission
- Driving under the influence of alcohol or drugs
- Acting rashly
You did not seek medical attention immediately.
The insurer will be suspicious if you wait too long to seek medical care for injuries caused in an automobile accident. Any delay allows them to argue that the collision did not cause your injuries.
There is no justification for the denial.
Hold on a second there. You would think that your insurance company would pay out your claim if there was no valid basis to reject it. If you think about it, you may as well. However, insurance adjusters are human and can make mistakes, whether on purpose or not. A “bad faith” refusal is one that lacks a valid reason, and is therefore immediately appealable.
- Examine the Denial Letter from the Insurance Company
Your motor insurance company’s denial of your claim will likely stem from just one or two problems. Read the insurance company’s refusal letter very carefully if you want to know what those reasons are. Please read the full document and focus on the explanations for the denial. These need to be explained in simple terms (or something close to it).
No action is required if you agree with the insurance company’s decision to deny coverage. It’s possible that you submitted the claim before learning that the incident in question was not covered.
This insurance firm probably has a point of view that you don’t agree with. As such, you should start working on your appeal immediately.
- Collect documentation
The next step is to compile whatever evidence you have that might help your case. The following are examples that fit the bill, but are not exhaustive:
- Photos and videos from the accident scene
- Photos and videos of your vehicle’s damage
- Estimates of costs for repairs
- Medical bills or benefit explanations
- Bills for incident-related charges such as towing or roadside assistance
- The police investigation report
- Statements of witnesses
- Insurance details and contact information for any other parties involved
- Notes you made about the occurrence, such as what you were doing at the time of the collision
If you have previously submitted these papers to the insurance carrier in support of your claim, please submit them again. If you submitted a claim before getting a more accurate repair estimate, for instance, you should include the more recent estimate with your appeal.
- Compose an Appeal Letter
Step two is to compose an appeal letter in which you respond to each specific point raised in the rejection letter. Justify your use of each piece of evidence and how it pertains to your claim in your letter. Whenever feasible, and to the extent allowed by your insurance, refer to particular coverages and exclusions.
Don’t only state that, “The other motorist was at blame, according to the police report.” A better response might be something like, “According to the police report, the negligent motorist ran a red light and collided with my car, which was in the right of way.”
In addition to requesting that the insurance company reevaluate its decision to deny coverage, your letter should include many specific recommendations. If you feel like your insurance adjuster didn’t look at all the evidence or denied your claim in bad faith, for example, you can request a new adjuster from the insurance company.
- If necessary, bring in a third party.
If your insurance claim is refused again on appeal, or if you just want to be absolutely certain that you have the best case possible, you should contact a third party.
You can either get advice from your state’s insurance department or engage a private vehicle insurance lawyer. Some state insurance departments might be slow, so it may be preferable to choose both.
Contact Your State’s Insurance Department
You shouldn’t make this decision flippantly. The insurance department (or insurance commission) in your state is a stressed-out bureaucracy that handles insurance disputes that cost millions of dollars. Personal vehicle insurance claims in the four- or five-figure range are nothing compared to the big picture.
As an alternative, individuals and businesses have insurance commissions to safeguard them against insurance company misconduct. If you think your insurance intentionally refused your claim or isn’t taking into account the fresh information you provided in your appeal, you should contact them.
The specific procedure for filing a complaint with a state agency varies by location, but in most cases you may do so via their website. You will receive written or electronic notice that the relevant agency is looking into your claim. Be ready to repeat the documentation and interviews that were part of your appeal as the case progresses.
You should know that your complaint may not be the only one filed against your insurance provider. It may initiate or be part of a broader probe of the company’s operations. The results of such probes may be substantial in the end, but you shouldn’t hold your breath waiting for the process to play out over the course of years.
Hire a Car Accident Lawyer
This is not a choice you should take lightly. Your state’s insurance department (sometimes called a “commission”) is a high-strung bureaucracy responsible for mediating insurance claims totaling millions of dollars. Insurance claims for private automobiles that cost four or five figures pale in comparison to the whole.
On the other hand, consumers and companies have insurance commissions to protect them from insurer abuses. You should contact your insurance company if you believe they denied your claim in bad faith or are not considering the new material you submitted in your appeal.
However, in most circumstances, you may submit a complaint to a state agency through their website, even if the particular protocol for doing so differs by area. If your claim is being investigated by a government agency, they will notify you in writing or electronically. As your appeal develops, you should be prepared to re-do the paperwork and interviews that were previously submitted.
Your insurance company may already be the target of several complaints, so be prepared. It might be the first step in, or an extension of, a more extensive investigation of the company’s practices. While the findings of such investigations might be significant in the long run, the process could take years.
An automobile insurance claim denial is more than an inconvenient situation. It prevents you from getting the money you were depending on to meet the costs associated with the accident. It may wreck havoc on your finances and put you in a never-ending cycle of debt and financial hardship.
It may be worthwhile to file an appeal with your auto insurer if you feel your claim was wrongfully refused.