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What to Do When a Car Accident Insurance Claim Gets Denied

— September 15, 2021

Do not sign anything without consulting a car accident attorney about what you stand to recover after your car accident injuries.

We rely on insurance companies to help us when we get into a car accident.  Unfortunately, too many people spend a long time waiting for a claim settlement after an accident just to receive word from an insurance claims adjuster that their claim has been denied.  Below, we will discuss how to approach a denied claim so that you get what you deserve after your car accident.

Your first step should be to determine the reasoning for your claim denial. If the reasoning is not sitting well with you, you can request mediation or arbitration on the substance of your claim.  However, arbitration may not do the trick.  You have the ability to file a lawsuit against the insurance company to recover the funds that you rightfully claimed after your accident.

Figure Out Why Your Claim Was Denied

When your car accident insurance claim is denied, you will receive notice of the denial, typically in the form of a letter. In this letter, the insurance claim adjuster will explain how much of your claim is denied and the reasons for the denial.  If you do not receive a letter, you should request one immediately.  Below are some of the reasons why your insurance claim could be denied:

Insufficient Coverage

All insurance policies, even car insurance policies, differ in their language.  The insurance adjuster may determine that the nature of your injuries falls outside of the coverage provided by the plan.  However, in the case of car accidents, injuries sustained directly from a car accident are almost always covered.  The question then is how much your insurance will cover in value.

Insurance companies may deny a portion of your claim while approving some of it or deny it entirely.  If you claim $25,000 in medical expenses, but your policy only covers up to $20,000, the insurance adjuster will likely deny $5,000 of your claim.

Illegal Activity

If the insurance company believes that your conduct at the time of the accident was outside the bounds of the law, they can most likely deny coverage.  For instance, if you were not licensed at the time of the accident or you were driving under the influence of drugs or alcohol, the insurance company may deny your claim, even if the accident was not otherwise your fault.

Insurance Fraud

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Certain behavior by a claimant can indicate to an insurance adjuster that the claimant may be trying to get away with insurance fraud.  Sometimes their safeguards extend too far and deny legitimate claims as well.

This is why it is critical that you seek medical attention immediately after the accident so that the extent of your injuries are documented.  Even if injuries only become apparent later, acting quickly to address your injuries helps to indicate to the insurance company that you are acting honestly.

Request Mediation for Your Claim

If you feel that your claim has been unfairly denied, you can appeal your claim through the insurance company and potentially request mediation. Mediation is an opportunity for you to get a “second opinion” on your situation from an independent source, like a mediator.  The mediator will collect information from both you and the insurance company and then render an opinion.  You have the ability to work with attorneys who handle auto accident cases throughout the mediation process.  You may also choose to bring in an independent insurance claims adjuster (who does not work for the insurance company) to assess your claim objectively.

To begin the mediation process, contact your state’s Department of Insurance.  Once the process is initiated, you will be assigned a mediator who will advise you of your next steps.  Each state has time limits on how long you have to bring your denied claim to mediation, so be sure to act quickly or face the possibility of your claim lapsing.

File a Lawsuit Against the Insurance Company

If all else fails, you can often file a lawsuit in court against the insurance company to recover the balance of your denied claim.  There are state-mandated time limits (also known as “statutes of limitations”) on how long you have to file a lawsuit against the insurance company.

Lawsuits against insurance companies may seem daunting, but taking this aggressive step can show them that you are serious about pursuing your claim.  Many lawsuits against insurance companies after car accidents are settled before either party even makes it inside a courtroom.  Some are even settled immediately before the trial commences.

Once you file your lawsuit, be prepared to be contacted by the insurance company.  Insurance representatives may offer you a settlement agreement, which will get you a portion of your requested compensation in exchange for you agreeing to drop the court case.  You should enlist the help of an attorney for your negotiations with the insurance company.  The first offer that you receive is rarely a fair one.  Do not sign anything without consulting a car accident attorney about what you stand to recover after your car accident injuries.

If you are concerned about affording legal help for a lawsuit after your claim was denied, you should know that most car accident insurance claim attorneys can work on contingency fee structures. Contingency fees are structured so that the attorney only takes home a portion of the verdict or settlement once you win your case.  This allows you to avoid paying legal costs until after you are successful in your case.

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