A denied claim is frustrating, but it is not always the final word. Insurers must follow the policy and state law, and you have several ways to challenge a decision you think is wrong.
Common reasons for denial
- The policy had lapsed or the driver was not covered.
- The insurer says the loss is excluded, such as intentional damage or business use.
- Late notice of the claim.
- A dispute over who was at fault.
- Missing documents or a disagreement about the repair or injury costs.
Steps to take
- Ask for the denial in writing, with the specific policy language the insurer relies on.
- Read your policy and compare it with the reason given.
- Gather evidence: photos, repair estimates, the police report and medical records.
- File an internal appeal or ask for a reconsideration, and keep copies of everything.
- Check whether your policy has an appraisal clause for disputes over the amount of a loss.
Outside help
Every state has an insurance department that accepts consumer complaints, usually for free. A complaint can prompt the insurer to review its decision. Most states also prohibit unfair claim practices, and an insurer that denies a valid claim without a reasonable basis may be liable for bad faith.
When to get a lawyer
Consider an attorney if the denial is large, involves injuries, or you suspect bad faith. Many insurance attorneys work on contingency. Keep deadlines in mind, since policies and state law set time limits for suing.
Frequently asked questions
Can my insurer cancel my policy after a claim?
Rules vary by state. Many limit mid-term cancellations, but insurers can often decline to renew.
Does appealing hurt my rates?
Appealing a denial does not itself affect your premium, though a paid at-fault claim may.