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What to do when car insurance company won’t pay a claim?

Here's what you need to know...
  • Make sure you file a claim as soon as possible after your car accident to avoid surpassing your state’s rules and regulations on the statute-of-limitations regarding car accident claims
  • If your claim is denied, read through the letter to make sure a valid reason was included
  • If you disagree with the decision, you can appeal the denial
  • If your appeal is denied, consider filing a bad faith lawsuit
  • Consider using a comparison tool to find an insurance company that offers better insurance policies and better custom service

To receive compensation for your car accident incurred expenses, you must file a claim with your insurance. If you do not file a claim, your insurance company won’t know that you got into an accident, and you will not receive any funds to repair or replace your car.

As a responsible driver, you have an insurance policy that complies with your state’s rules and regulation. You pay your premium on time and keep your information updated. But you were involved in a car accident, and now the insurance company won’t pay your claim. What do you do?

You can immediately start looking for a new policy. Even if the carrier eventually pays your claim, you will probably want to find a car insurance carrier that offers better customer service.

You can do this by using our FREE comparison tool and researching the insurance companies that have available policies. Enter your zip code into our comparison tool above!

Claims Processing

AdobeStock_22080151-1600x1600After you file your claim, your insurance company will start investigating the details of the accident. They would walk to talk to you and the other driver if another driver was involved in the accident and will also want a copy of the police report. If you took notes or wrote down any witness statements, you should also give those to your insurance company.

Once your insurance company has all the details, they will send out an adjuster or instruct you to take your car to a mechanic shop to get estimates on repairs. The adjustor’s information and the mechanic’s shop’s estimates will determine how much money you receive to repair or replace your car if your claim is approved.

Reasons Insurance Companies Give for Failing to Pay Car Insurance Claims

The reasons car insurance companies deny claims are numerous. When an insurance company doesn’t want to pay a claim, they will use every available excuse at their disposal, including nitpicking your insurance policy.

  • The police were not called, and no police report was filed.
  • You were deemed the at-fault driver or partially at-fault.
  • You filed your claim after the statue-of-limitations expired, according to your state’s insurance rules and regulations.
  • Your damage claims aren’t covered by your car insurance policy.

Valid Reasons Insurance Carriers Can Give to Deny Your Claim

AdobeStock_53464240-1600x1600Car insurance companies can deny your claim for several valid reasons.

  • Your claim was determined to be fraudulent. In other words, you didn’t get into a car accident. Your car wasn’t as damaged as you led your insurance company to believe, or you deliberately got into an accident or caused an accident.
  • You didn’t read the details of your policy before or after the accident and filed a claim for insurance you don’t have. This kind of claim frequently occurs with hail damage or damage from hitting an animal.
  • Your claim involved something that is specifically excluded in your policy. This kind of claim often occurs if you let an excluded driver drive your vehicle, or your accident occurred while you were conducting business, and you don’t have an insurance policy that covers business use of your vehicle.
  • You made modifications to your car that significantly increased its value and failed to report the enhancements to your insurance company.
  • You didn’t pay your bill, or your coverage expired before the accident.

Appealing Your Denied Claim

When you car insurance claim is denied by your insurance company, they will send you a letter explaining their decision. Read through the letter, determine the reason your car insurance claim was denied, and make sure it is an applicable reason.

If it was not an appropriate reason and you wish to appeal, the letter should tell you the steps you need to complete to appeal the decision.

In general, you will need to make a case for yourself and submit your information, which contradicts the insurance company’s denial. Write a letter including all information, with any pictures of the accident scene, witness statements, statements from the other driver, and any medical care or tests you’ve received for your accident related injuries.

If your appeal is denied, you are not out of options. However, the options get more complicated. If you choose to sue your insurance provider for operating in bad faith, it is likely that you are also ready to switch insurance companies.

Bad Faith Claims

AdobeStock_40258869-1600x1600If you believe your car insurance company is operating in bad faith, you may be able to sue them. However, you must be able to prove that your insurance company was being willfully unreasonable and knew it but continued by denying your claim.

You may want to pursue a bad faith insurance lawsuit if you can prove your insurance company did any of the following:

  • Provided you with a claim letter that failed to mention the reason for your insurance claim denial.
  • Deliberately delayed the payment for your car accident related expenses.
  • Deliberately tried to settle the claim for far less money than the cost of your accident-related car repairs and medical expenses.
  • Denied your claim even though your claim was completely valid according to your insurance policy and the circumstances of your accident.
  • Did not provide you with or refused to issue documents that you requested.
  • Threatened you in any manner or misrepresented the insurance law or the language in your policy.

After you’ve done everything within your power to settle your claim to your satisfaction and according to the law, there’s a good chance you will not want to do business with your current insurance company again.

To find a better insurance company that offers more affordable insurance policies and better customer service, you can use our FREE comparison tool to search rates and policies. Enter your zip code below to get started!

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