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Whether you’ve experienced an accident or are preparing for the future, knowing what happens when car insurance denies a claim is crucial. Unfortunately for drivers, insurance companies don’t always approve claims. And denial can mean the difference between getting your car fixed and falling short. Fortunately, we’ve researched the subject and found the answers you need.
When car insurance denies a claim, they typically notify you with their decision and the reason for the denial, including any steps you can take to resubmit or modify the petition. Fixing whatever issues they specify could result in your claim being accepted and paid.
However, car insurance can deny a claim for a variety of legitimate reasons. In such cases, you will either have to drop the claim or hire an attorney to argue your case.
Of course, many variables affect whether your car insurance approves or denies a claim—and how you must proceed afterward. Keep reading for all the details on insurance claims denials and how to navigate them.
How Do You Fight an Insurance Claim Denial?
When your car insurance company denies your claim, they typically send a letter explaining the decision. The claim denial letter outlines the company’s reasoning. In some states, no letter is required. In those situations, it’s up to the insured driver to find out the reason for the denial.
1. Find Out Why You Were Denied
The first step in fighting a denial is responding to whatever issues the insurer highlights. You can request a letter outlining the denial if you don’t receive one automatically.
Or, you can call your insurance adjuster and ask for specifics. Make sure to take thorough notes and ask for confirmation regarding details or terminology you’re unclear on.
2. Deliver Additional Evidence
Most of the time, addressing a denial involves sending additional documentation of the accident.
Providing photos, witness statements, repair estimates, and other information falls under the responsibility of the insured party. After all, the insurance company would prefer not to pay out on your claim; their interest lies in preserving their assets.
Therefore, you should keep your documentation current and as accurate as possible. The information you provide could change the insurer’s mind about accepting your claim. Even dash camera footage can contribute a wealth of data to your file, so you must include all resources when compiling your claim.
If you want to install a dash camera system to protect yourself against fraudulent insurance claims or so that you can pursue legal action if an accident occurs, consider a dash cam like the Rove R2-4K.
3. Seek Legal Advice
Ultimately, if you feel you have a strong case, but keep receiving denials from your insurer, it might be worth enlisting the help of a lawyer. Especially if you sustained severe injuries that can impact your quality of life, consulting with an attorney is a vital step in getting the claim covered.
How Long Does an Insurance Company Have to Accept or Deny a Claim?
There’s no set rule for how long an insurer has to accept or deny a claim. The best way to determine your insurance company’s timeline and reporting requirements is to read your policy thoroughly.
But regardless of the timeframe your insurer stipulates, it’s in your best interest to file immediately.
Many insurance companies allow you to file claims for up to a year following an incident. But because a lot can change over a year, it’s ideal to file right away. After all, a year later, the other party involved in the crash may have switched insurers, bought a new car, or moved out of state—all factors which can complicate your claim.
Why Do Insurance Companies Deny Claims?
Insurance companies deny claims for a variety of reasons, from a lack of adequate information to more complex issues.
Policy Coverage Issues
One common reason why car insurance companies refuse to cover a claim is due to a lack of adequate coverage. Your insurance policy may not cover the accident scenario. For example, if you file a claim that falls under comprehensive coverage—such as rodent damage—but your plan does not include that feature, your claim will be denied.
Policy Limits Cap Claims
In some cases, your insurance company may argue a claim because of your policy limits. For example, if the damage to your vehicle exceeds the coverage limit of the policy, the company may refuse to pay.
The Timing Doesn’t Add Up
Companies may also reject claims based on the submission timeline. Say your insurance coverage lapsed before you submitted the paperwork—the company has every right to deny you since you’re technically not their client anymore.
Similarly, if you missed the deadline for filing a claim, your insurance can refuse to cover the claim since you didn’t fulfill their reporting requirements.
Fault Laws Disqualify Your Claim
If your state is a fault state—meaning drivers are assigned full or partial responsibility for an accident—your insurance company could deny a claim if you caused the accident.
Depending on the outcome of the accident, and what police reports and other documentation state, the insurance company may determine that the damage to your vehicle was your fault. In such cases, the company can deny the claim outright.
However, no-fault states have different rules. If you live in a no-fault state—there are 18 which require no-fault or personal injury protection (PIP) insurance—there’s a higher chance your insurance company will cover your expenses.
No-fault insurance or PIP coverage typically covers health insurance expenses, lost income, funeral expenses, and more—but there are caps to the amounts your insurer will pay. The company can deny claims over a certain amount, and they can also deny vehicle damage, theft, and property damage claims.
You’re Not on the Insurance Policy
If you are not a named policyholder, an insurer can deny your claim on that basis alone. Even if your parents, spouse, or another family member retain coverage, that doesn’t mean you can qualify by association.
Similarly, you typically cannot file a claim on another person’s vehicle under your insurance policy. While auto insurance follows the driver in most cases, you can’t apply comprehensive or collision coverage to any vehicle other than the one(s) specified on your policy terms.
Still, liability coverage tends to “follow” the driver, providing some amount of insurance no matter what vehicle you drive. However, many exceptions to this rule crop up—most often in the form of insurance claim denial letters.
You Were Under the Influence
Contract terms vary, but most insurers include a clause that stipulates they won’t pay if you were under the influence of drugs or alcohol when the accident occurred. Technically, insurers don’t have to cover accidents caused by “intentional conduct.”
Therefore, many insurance companies take the position that drinking and driving is intentional to avoid paying out on claims.
You Filed the Wrong Claim
When you file a claim with your insurer, you must fill out the paperwork adequately and accurately. Part of filing is addressing the appropriate part of your policy. For example, if you file a claim under uninsured motorist coverage but the other person involved in the accident has insurance, your claim won’t be accepted.
Similarly, if you file a collision claim instead of a comprehensive one for damages due to hitting a tree, for example, the insurer can deny you.
You Didn’t Report the Incident to Police
Regardless of the severity or outcome of the incident, you should call the police to report an accident involving injuries. Filing a police report helps you nail down the specifics of the accident and documents who was involved.
Insurance adjusters can use police reports to determine who, if anyone, is at fault and whether your claim falls under their policy. Without a police report, you may not be able to confirm who the other driver was, let alone their insurance details or any additional identifying information.
How Can I Get a Record of Past Claims?
If you need more details on your insurance claims record, you can obtain a report that includes all claims and their statuses. The Fair Credit Reporting Act (FCRA) guarantees drivers one free report per year from the agencies that collect insurance claims information.
These reports are helpful if you have older claims you want to check on or if you’ve changed insurance companies and can no longer reach your former agent.
Two report options include:
Keep in mind that any claim you file—or even issues you inquire about on the phone with your agent—can affect your records and remain on your file indefinitely. Therefore, you should look over your records regularly and speak carefully when speaking to insurance agents regarding your policy coverage and claims issues.