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What to Do if Your Car Insurance Claim is Denied?

Denied car insurance claim

Denied Car Insurance Claim in San Luis Obispo, CA

You probably hope you will never have to file a car insurance claim. But if you have a car accident in California and use the insurance coverage you’ve been paying for (usually for years), you would naturally presume you would receive help for all your losses. What if your claim is turned down by your car insurance provider?

Find out what to do in case of a denied car insurance claim and why claims are usually denied by consulting a personal injury lawyer at 805 Law Group. If you know why your car accident claim was denied, you should be able to take better steps when filing it to make sure the process goes smoothly.

Hire a personal injury lawyer in San Luis Obispo or Atascadero, California to help you not only in case of an accident but also to help you get the most compensation possible after an accident. You deserve to have your quality of life restored as much as possible, and one of the best ways to do that is with the help of an accident lawyer.

What Are The Reasons For Automobile Insurance Claim Denials?

A denial of a claim can be partial or total. The former happens when your claim is partially paid by the insurer. Simply put, claims are denied by car insurers when they think they have a legal or contractual right for doing so. This means they disagree with the claim in whole or in part.

Some common reasons why insurance claims are turned down are:

  • The auto insurance does not cover the individual who is filing the claim.
  • The motor vehicle wasn’t on the auto insurance policy.
  • No policy was in effect when the accident happened, happening often when premiums are unpaid or when the policy was not renewed.
  • Policy limits have been reached.
  • After looking into who was at fault for the accident, the car insurance company concluded that no coverage was applicable.
  • When the accident happened, the individual making the claim was driving while either intoxicated or with no license.
  • The claimed injuries already existed before the accident, or the car damage was not caused by the accident.
  • The insurance policy for the car doesn’t cover the claim. For instance, if a tree fell on your parked car, and you don’t have comprehensive insurance, you can’t claim for the damage.
  • You didn’t inform your car insurance provider about the accident immediately.
  • You told the insurance provider a lie when you signed up for car insurance coverage or filed a claim.

In all the above cases, the automobile insurance provider possibly did the right thing by denying the claim. However, these denials could also be wrong or too soon.

If a car insurance company rejects your claim, what to do next depends on what kind of claim you submitted and why the company said no.

What Are The Different Types of Car Insurance Claims?

Denied car insurance claimWhen you are involved in an automobile accident, you would either file a 1st-party or a 3rd-party claim.

1st-Party Claim

A 1st-party claim is when you file a claim with your car insurance provider. Most of the time, you will file a 1st-party claim if:

  • you have a no-fault insurance policy for your car
  • you are claiming through your “personal injury protection” or “medical payments” coverage
  • you were to blame for what happened, or
  • the driver who was at fault was not insured.

3rd-Party Claim

A 3rd-party claim is filed with the car insurance provider of another driver. You could file a claim against a 3rd party if you think the other driver caused the accident.

1st-Party Claim vs. 3rd-Party Claim

One of the primary distinctions between these two types of claims is that, with other factors being equal, 1st-party claims have a lower probability of being denied. The reason is that you have a legal agreement with your auto insurance company that says it has to do what is written in your policy. In other words, this makes you the main legal responsibility of the car insurance company. Also, most states have laws that tell car insurance companies how to manage claims from their policyholders.

On the other hand, when you file a 3rd-party claim, there is no contract. So, the car insurance company has no legal duty towards you but to its policyholder.

What to Do If You Get Denied Car Insurance Claim

If your 1st-party claim is turned down, the first thing you should do is get a written explanation of why. Most car insurance companies will immediately write a letter explaining why the claim was denied. Make sure you ask for this letter if they don’t give it to you. You could back up your claim with more proof based on the stated reasons in the letter. This could be a police report, photos of the accident, an estimate of how much it will cost to fix, or medical bills.

Next, consider filing an appeal or requesting your car insurance company for an appraisal. How this process goes down will be described by your insurance policy.

Lastly, if you feel like you’ve tried everything and there is nothing else you can do, you might want to bring in a third party. This could mean filing a complaint with the insurance commissioner, hiring an independent claims adjuster, or talking to a San Luis Obispo, California lawyer.

If your claim against a third party is turned down, you will have options like the ones discussed above. One big difference is that, depending on your type of car insurance, you might be able to file a 1st-party claim with your own car insurance company.

Denied Car Insurance Claim in Bad Faith

If a car insurance claim is denied, it is probably because the insurance company made a genuine mistake or because there’s legitimate doubt about who was at fault or how much damage was done. But on rare occasions, the insurance provider might willfully reject a legitimate claim. When this happens, this could be a sign of bad faith on the part of the insurance company.

Generally speaking, insurance bad faith relates to an insurance company’s unreasonable denial of a benefit under an insurance policy. This may include:

  • choosing not to pay a valid claim
  • not doing enough investigation on a claim
  • not giving any reason why a claim was denied
  • knowingly going against state regulations about how claims are processed, and
  • Choosing to ignore relevant details that would support a valid claim.

People can sue their car insurance company or another car insurance company for bad faith. But if you want to sue another car insurance company for denying your 3rd-party claim in bad faith, you will have to show that the company did something much worse, like lie about your claim. An insurance provider may be responsible for indirect and exemplary damages if a claim is denied in bad faith.

If you think your car insurance company wrongly turned down your claim, you might want to talk to a San Luis Obispo, CA car accident lawyer about what you can do.

Get Legal Help From 805 Law Group!

If you sustained injuries in a car accident in California, let our car accident lawyers in San Luis Obispo, CA, take care of your case. We will fight to get you the money you need for your injuries and other damages. As car accident lawyers with years of experience, we know how hard and stressful it is to deliberate your rights and how you’ll pay for your medical bills, care, and lost property after an accident.

Our attorneys have been successfully fighting for people hurt in car accidents caused by other drivers for over 20 years. We work to ensure that you and your family get the most money possible.