A car accident is stressful, but it can become an even bigger headache if your auto insurance company denies your claim. Depending on the type of loss, your auto insurer might have a legitimate reason to do so, but that may not always be the case. If a claim denial happens to you, understanding the reason for the denial can help you plan what to do next.
what is a claim denial letter?
After filing a claim with your auto insurance company, an insurance adjuster will be responsible for documenting the details of the accident. After reviewing the facts provided, the adjuster will determine whether the auto insurance claim will be denied or accepted. If the accident is deemed not covered by your auto insurance policy, the insurance company will send you a formal letter stating the factors that led to the decision.
A denied auto insurance claim does not necessarily mean the end of the claims process. If you disagree with your insurer’s claim denial, you have the right to appeal the insurance company’s decision.
why did my auto insurance company deny my claim?
Depending on the circumstances surrounding your auto insurance claim, several factors could result in your claim being denied. Police reports, eyewitness statements, reenactments of an accident scene, and more can influence the outcome of a filed auto insurance claim. In some cases, a claim may even be denied due to bad faith or misrepresentation of the facts, so it’s important to be truthful and accurate with your auto insurance company when reporting your claim.
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If you receive a denial letter, read it carefully, as it will usually include evidence to support the decision. Some common reasons a claim is denied include the following:
expired insurance policy
Without valid insurance in force at the time of an accident or claimable event, there is no coverage for the insurance company to pay. Paying your auto and home insurance premiums on time is the best way to ensure coverage is in place when you have to file a claim. Whether you pay the policy term in full or use auto pay to avoid late payments, it’s crucial to avoid a gap in coverage. In addition to the likelihood of your claim being denied, a break in coverage could also result in fines and other penalties, including suspension of your driver’s license and vehicle registration, depending on your state.
When shopping for auto insurance, pay attention to the coverages you choose and what they provide financial protection for. For example, you may have an older car and feel comprehensive and collision coverage may not be needed. however, if your car is stolen or you cause an accident, the insurance company will not be able to help you without the proper coverage.
When reviewing your claim, the adjuster can see the inclusions in your policy. If you file a claim for damage that is not covered or specifically excluded, your insurer will send you a claim denial letter.
It can be tempting to choose state minimum liability limits to keep the cost of auto insurance down. While you may save on your premium, if you are involved in an accident with multiple injuries to others or crash into an expensive car or building, you may exhaust your liability limits and be vulnerable to a devastating financial loss. For example, let’s say you have $25,000 in property damage liability coverage, but you have $40,000 total value in a car. The auto insurance company may pay up to the $25,000 allotted, but deny the remaining $15,000, which could leave you vulnerable to a lawsuit for the remaining amount.
accident involving an uninsured motorist
While most states require liability coverage, not all states require uninsured motorist coverage. If someone causes an accident with you, provides false insurance information, or hits the road, finding the right insurance details can be difficult or impossible. If you don’t have uninsured or underinsured motorist coverage, your claim could be denied.
the at-fault driver’s insurer denied his claim
In cases where another driver is found to be at fault and your auto insurance company denies the claim, there can be a number of reasons for this. some examples include providing incorrect insurance details or not having enough or the correct coverage. Also, if an accident occurs in a no-fault state, you are responsible for paying your medical expenses up to your policy limits.
appeal the denial of your auto insurance claim
You can appeal the decision if you feel there was a mistake in the auto insurance company’s claim denial. Most insurance companies have a process for you to dispute a denied claim. Here are some steps to consider when appealing an auto insurance claim decision:
- Gather evidence: Review any documentation provided by the insurance company and gather the evidence you need to appeal. this could include police reports, eyewitness information, photographs, medical reports, and other supporting evidence. make copies of everything to provide to the insurance company so you can keep the originals.
- Draft Appeal Letter: This letter will explain why you disagree with the insurance company’s decision. be sure to explain why each piece of information was provided in step one, like any police report. Please provide as much detail as possible, referring to the policy information and claim denial letter as necessary.
- Consider Hiring an Attorney: If you are not comfortable taking these steps or want an expert opinion, it may be a good idea to hire an attorney. They can review the case and supporting documents to draft a demand letter that requires the insurance company to respond and defend your claim denial. While it may cost you money up front, it could be a worthwhile expense to overturn the claim denial if you think your insurer made the wrong decision.
Understanding the claim denial letter and why an auto insurance company chose not to make a payment is the first step in determining the validity of a denied auto insurance claim. Most auto claim denial cases are valid, although others may not. In this case, appealing the insurance company’s decision may result in the decision being reversed or an offer made to cover the damages.
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