Being involved in a car accident can be a traumatic experience, sometimes leaving behind significant physical and mental wounds. Unfortunately, the stress of this trauma can continue when you’re dealing with a car insurance company that denies your claim for damages. Understanding the insurance claim process and what to do when car insurance denies claims for compensation can be helpful in allowing you to better navigate the process and explore potential strategies to remedy the situation.
An insurer may deny claims for a variety of reasons, and in some cases, it may do so in bad faith. In this article, we will go through common reasons why car insurance won’t cover accident damages and offer three possible strategies to dispute the decision or further pursue your claim.
[READ: How to Report a Traffic Accident to the Police]
Filing a Claim for Damages With an Auto Insurer
After a collision, the primary role of a car insurance company is to assess the damage, investigate the claim based on existing evidence and determine each involved party’s liability. This process–and the outcome–can vary depending on the types of damages incurred as a result of the accident, and whether the state is an at-fault or no-fault state.
Types of Damages
Damages that can occur in a car accident can include vehicle damage, medical bills, lost wages, wrongful death, pain and suffering and emotional distress. Property damage includes any damage to your vehicle, or property in your vehicle, and most other damages are included under personal injury damages.
When damages are clearcut and fairly quantifiable, the claims process will be somewhat more predictable. It gets less so–and can be subject to a claim denial–when damages are more complex, less tangible and not fully supported by documentation.
At-fault vs. No-fault States
In an at-fault state, the claim for all damages will be filed with the at-fault driver’s insurer. In a no-fault state, a claim for property damages will be filed with the at-fault driver’s insurer, but any personal injury claims are filed with each injured parties’ own insurer. Which insurer you end up working with can impact the course of the claims process and whether you may end up facing a denial.
Why Do Insurance Companies Deny Claims?
The answer to the popular question, “What happens if the at-fault driver doesn’t have enough coverage?” is also one of the most common reasons why an insurer will deny a claim. Essentially, if the amount of damages requested in the claim filed with the at-fault driver’s insurer exceeds their policy limit, the claim will only be partially paid out, or it may get denied in full.
Another reason why a claim might get denied early in the process is if the driver filing the claim was contributorily negligent. In some states, a car accident victim who shares any degree of fault for the accident may not recover damages from other drivers. For example, Driver A would normally be at fault for rear-ending Driver B. However, in a contributory negligence state, if Driver A shows that Driver B excessively braked or was following the car in front too closely, and therefore is partially at fault, then Driver B’s claim might get denied outright.
Other reasons why car insurance won’t cover accident damages and why they might deny a claim can include:
— Non-payment of premiums or policy lapse
— Insufficient evidence or documentation
— Late claim filing
— Accident took place outside of the geographical coverage area
— Bad faith by the insurance company
Some reasons your claim is denied are more complex and some are unavoidable. For example, if the insurance company acts in bad faith when they deny your claim, that’s largely out of your control. The same applies if the at-fault driver is operating their vehicle outside of their geographical coverage area or didn’t pay their premium and their coverage expired. In these cases, you would still have a remedy to file a lawsuit against the at-fault driver and the insurer in the event of bad faith.
To protect yourself against a claim denial, you should collect as much evidence as you can after the accident by taking photos and writing down a description of the incident while it’s fresh in your memory. You should also ensure you submit your claim as soon as possible to avoid a denial for late filing.
[Read: In a Car Accident? No Damage? Here Are 3 Things to Consider]
3 Strategies if an Insurance Claim Is Denied
If car insurance won’t help cover accident damages when you first file your claim, there are a few strategies you can try. However, keep in mind that while it may be possible to do any of these options yourself, it will be a smoother process with help. One possible source of help would be your own insurance company, which may be willing to help you pursue your claim.
You might also consider hiring an experienced car accident attorney. If covered by your insurance policy–or allowed by state law–you may be eligible to be reimbursed for attorney’s fees incurred in obtaining your car accident compensation. When pursuing an action against your own insurance company, you’ll likely be responsible for your own attorney costs up front, but if you win your case, you might be eligible to request attorney’s fees as part of your damages.
1. Send a Demand Letter
If an insurance company denies your claim, one strategy is to send a demand letter listing the evidence of damages and requesting a specific amount of compensation. This is essentially initiating a settlement agreement, so think of it as an opening for negotiations. Depending on the insurance company and the specifics of the claim, the company may deny your offer or present a counter offer and an explanation for why they will not pay your full demand.
While there is not usually a specific deadline on when you can send a demand letter, you should send the letter as soon as possible and consult your state’s statute of limitations laws to ensure your claim is still actionable.
2. Appeal the Decision
If car insurance won’t cover accident damages because it denied your claim, rather than a demand letter, you can also appeal the claim denial by using the insurer’s formal appeals process. You can start the process of requesting that your claim denial be re-examined and overturned, by drafting an appeal letter to the insurance company outlining the case and providing justification for reviewing, and ultimately overturning, the original decision.
Insurance companies have a set period for when appeals will be accepted, so consider appealing the decision as soon as you can after receiving it. Failure to file a timely appeal–usually around 180 days or six months after denial–means you lose the right to appeal the decision, which could jeopardize your right to file a lawsuit against the insurer in court.
3. File a Lawsuit Against the At-fault Driver and Insurer Denying Your Claim
The first two strategies follow the same processes whether the at-fault driver’s insurance won’t pay your claim or your own insurance company won’t pay. The third strategy is to sue the at-fault driver directly or bring a suit against the insurer that denied, or refused to settle your claim based on your demand for compensation.
A car accident lawsuit is considered the most complex and expensive remedy since you’ll need to successfully prove your case under the laws of your state to get compensation, as opposed to writing a letter and negotiating with the insurer. You might also need to exhaust the formal appeals process before initiating a lawsuit, so this is usually a last resort when car insurance won’t cover accidents.
[Read: How Is Fault Determined in a Car Accident?]
Car Insurance Won’t Cover Accident Damages in Your Case? An Attorney Can Help
The aftermath of a car accident can be very stressful and difficult to handle on your own. Instead of trying to navigate local negligence laws and draft demand letters on your own, consider hiring an experienced car accident attorney to get you the car accident compensation you deserve.
[Related:How to Sue Someone]
Legal Disclaimer
This content contains general legal information, but any references to the law are subject to changes through ongoing updates in legislation, regulation, and caselaw at the federal and state levels. This content does not constitute legal advice and should not be relied upon as legal advice for any particular situation. Nothing in this content should be interpreted as creating an attorney-client relationship. If you have legal questions, you should consult the advice of an attorney who is licensed to practice in your jurisdiction.
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3 Strategies if Car Insurance Won’t Cover Accident Damages originally appeared on usnews.com
