Dealing with insurance companies is typically frustrating and difficult, and it only gets worse if your claim is denied. As much as we might like to believe that an insurance company will pay valid claims, this is not always the case. Insurance companies make money by taking in premium payments and paying out as little as possible on claims. If you are dealing with a claim denial, it's important to know what you can do about it.
Claim Denial Letter
When an insurance company denies a claim, you will receive a letter of denial. In the letter, the insurance adjuster must state which factors led to the decision to deny your claim. So, it's important that you read and understand the reasons stated in the denial letter. After reading the letter, if you disagree with the reasoning, or don’t understand it, you should speak with an attorney who handles insurance cases and learn your options.
Why Was Your Claim Denied?
Claims are denied for various reasons, depending on the circumstances of the situation. Police reports, eyewitness statements, insurance policy provisions, and even the amount and location of collision damage on the involved vehicles can all be factors that lead to a denied insurance claim. The letter denying your claim must reasonably inform you of the basis and reasons for the denial. Some common reasons for claims to be denied include:
Policy exclusions — Most insurance policies contain a long list of situations where the coverage you thought you had does not apply. These are called “exclusions.” They can often be difficult to understand and interpret. If your claim involves a situation that is excluded, you may not have a valid claim. But if the exclusion language is unclear, and it’s debatable if it applies to your situation, you may be legally entitled to coverage despite the denial letter.
Lapsed insurance policy — If your insurance policy has lapsed, that is expired for late payment of premiums before the day of the accident, the company will probably deny coverage for your claim. Depending on your insurance company and policy there may be a “grace period” that allows you to pay the premium and reinstate your coverage within a period of time after the expiration date. If your claim is substantial, you should talk with an attorney who handles insurance cases before accepting the company’s denial – you may well have legally enforceable coverage.
Not enough coverage — It may be attractive to save money by buying the lowest coverage limits, but this is also a common cause for denied claims or limited liability payouts that do not protect your hard-earned money and assets. If you choose an insurance policy with minimum liability, you definitely will save money on your premiums; but if you're involved in a serious accident with major injuries or extensive damage to an expensive vehicle, it could put your savings and personal assets at risk.
Your claim was denied in bad faith — If your claim was unreasonably denied or denied without reasonable justification, your insurance company may have committed bad faith conduct. If this has happened, you may not only legally obtain the coverage you paid for, but in some cases up to 3 times that coverage as a penalty for the company’s misconduct. An attorney can assess whether you have a claim for a bad faith denial of your insurance claim, and advise you if you have a case, and what you can recover.
What Can You Do About an Insurance Claim Denial?
If you think the insurance company may have incorrectly denied your claim, or unreasonably denied it under the circumstances, you should talk with an attorney that handles insurance disputes before accepting the company’s denial. Often you will find that such attorneys will give you a free consultation about your specific claim situation.
Hiring an attorney — taking on these tasks can be a bit overwhelming at times. Hiring a skilled attorney may be a good idea for those who aren't super comfortable taking on this responsibility alone. They can help review your case and get you the results you deserve if you feel you were wrongly denied.
If your insurance claim was wrongfully denied, you may be able to get the claim paid and even recover additional damages to compensate you for wrongful denial of a claim. Let the skilled insurance dispute team at [[INVALID_TOKEN]] see if they can help. If you think your claim was wrongfully denied by your insurance company.
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