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Options After Car Insurance Claim Denied | Nolo

Car insurance is probably one of those things you hope you never need. But when you end up falling back on the coverage you paid for (often for years) after a car accident, you’re hoping to get help with all relevant losses. But what if the auto insurance company denies your claim? In this article, we’ll discuss why claim denials can occur, your options (as a policyholder and when filing a claim with someone else’s insurer), and more. (Get the basics on how car insurance coverage works.)

why auto insurance companies deny claims?

A claim denial can be in whole or in part (the latter occurs when the insurer pays a portion of your claim). Simply put, auto insurance companies deny claims when they believe they have a contractual or legal right to do so. in other words, they believe that all or part of the claim is invalid. Common reasons for claim denial include:

Reading: Car insurance claim denied what next

  • claimant is not covered by auto insurance policy.
  • the vehicle was not listed on the auto insurance policy
  • there was no policy in force at the time of the accident (common when premiums are not paid or the policy is not renewed
  • claim exceeds policy limits
  • the automobile insurance company’s investigation related to the fault of the automobile accident resulted in the conclusion that there is no applicable coverage
  • claimant was driving without a license or under the influence of a substance at the time of the accident
  • claimed injuries were pre-existing or claimed vehicle damage was not related to the auto accident
  • the auto insurance policy doesn’t cover what’s in the claim (without comprehensive coverage, you can’t make a claim for damages when a tree falls on your parked car, for example)
  • did not immediately report the accident to the automobile insurance company, and
  • Lied to the insurance company when applying for coverage or during the claims process.
  • In the above situations, the auto insurance company may have correctly denied the claim, but any of these types of denials could also be wrong or premature. If an auto insurance company denies your claim, your next steps will depend on the type of claim you filed and the basis for the denial.

    types of auto insurance claims

    If you are in a car accident, you will file either a first party claim or a third party claim.

    A first party claim is a claim you file with your own auto insurance company. You will typically file a first party claim when:

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