Insurance company

What to do if an auto insurance company denies your claim

A car accident is stressful, but can become even more of a headache if your auto insurance company denies your claim. Depending on the type of claim, your auto insurer might have a legitimate reason to do so, but that might not always be the case. If a claim rejection happens to you, understanding the reason for the rejection can help you plan what to do next.

What is a claim denial letter?

After filing a claim with your auto insurance company, an adjuster will be responsible for documenting the details of the accident. After analyzing the facts provided, the adjuster will determine whether or not the auto insurance claim will be denied or accepted. If the accident is deemed not covered by your auto insurance policy, the insurance company will send you an official letter stating the factors that led to the decision.

A denied auto insurance claim does not necessarily mean the end of the claims process. If you disagree with your insurer’s refusal, you have the right to appeal the insurance company’s decision.

Why did my auto insurance company deny my claim?

Depending on the circumstances surrounding your auto insurance claim, several factors could cause your claim to be denied. Police reports, eyewitness statements, accident scenario re-enactment and more can influence the outcome of a submitted auto insurance claim. In some cases, a claim could even be denied due to bad faith or misrepresentation of facts, making it important to be truthful and accurate with your auto insurance company when reporting your claim. .

If you receive a rejection letter, read it carefully, as it will usually include evidence to support the decision. Here are some common reasons why a claim is denied:

Expired insurance policy

Without valid insurance in place at the time of an accident or claimable event, there is no coverage to be paid by the insurance company. Paying your home and auto insurance premiums on time is the best way to ensure coverage is in effect when you need to make a claim. Whether you pay for the full term of the policy or use autopay to avoid missed payments, avoiding a lapse in coverage is crucial. In addition to the likelihood of your claim being denied, a lapse in coverage could also result in fines and other penalties, such as suspension of your driver’s license and vehicle registration, depending on your state.

Policy exclusions

When buying auto insurance, be careful about the coverages you choose and the financial protection they provide. For example, maybe you have an older car and you don’t think comprehensive collision coverage is necessary. However, if your car is stolen or you cause an accident, the insurance company will not be able to help you without the proper coverage.

When reviewing your claim, the adjuster can see your policy inclusions. Filing a claim for damage for which you are not covered or which is specifically excluded will result in a letter of denial of claim being sent by your insurer.

Not enough coverage

It can be tempting to choose the state’s minimum liability limits to keep the cost of car insurance low. Although you can save on your premium, if you are involved in an accident with multiple injuries to other people or hit an expensive car or building, you can exhaust your liability limits and be vulnerable to devastating financial loss. For example, let’s say you have $25,000 in property damage liability insurance, but you total a car worth $40,000. The auto insurance company may pay up to the $25,000 allotted but deny the remaining $15,000, which could leave you vulnerable to a lawsuit for the remaining amount.

Accident involving an uninsured motorist

While most states require liability coverage, not all require coverage for uninsured motorists. If someone causes an accident with you, provides false insurance information or hits and misses, it may be difficult or impossible to find the correct insurance details. If you do not have uninsured or underinsured motorist coverage, your application may be denied.

The at-fault driver’s insurer denied your claim

In cases where another driver is found to be at fault and their car insurance company denies the claim, there may be several reasons for this. Some examples include providing incorrect insurance details or not having enough or the right cover. In addition, if an accident occurs without fault, you are responsible for paying your medical expenses up to the limits of your policy.

Appeal your auto insurance claim denial

You can appeal the decision if you feel a mistake in the car insurance company’s denial of the claim. Most insurance companies have a process in place for you to dispute a denied claim. Here are some steps to consider when appealing an auto insurance claim decision:

  1. Gather the evidence: Review all documents provided by the insurance company and gather the evidence you need to appeal. This could include police reports, eyewitness information, photographs, medical reports and other supporting evidence. Make copies of everything to provide to the insurance company so you can keep the originals.
  2. Write a letter of appeal: This letter will explain why you disagree with the insurance company’s decision. Be sure to explain why each piece of information was provided in the first step, such as police reports. Provide as much detail as possible, referencing policy information and claim denial letter as needed.
  3. Consider hiring a lawyer: If you are not comfortable following these steps or would like to get expert advice, it may be a good idea to hire a lawyer. They can review the file and supporting documents to write a formal notice asking the insurance company to respond and defend its denial of a claim. Although it may cost you money upfront, it could be a worthwhile expense to reverse the denial of a claim if you think your insurer made the wrong decision.

Understanding the claim denial letter and why an auto insurance company has decided not to make a payment is the first step in determining the validity of a denied auto insurance claim. Most auto claim denial cases are valid, although some are not. In this case, appealing the insurance company’s decision may result in the decision being reversed or an offer being made to cover the damage.

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