What Happens If Your Insurance Claim is Denied
You’ve been injured in a car accident that wasn’t your fault. You’ve done the things you were supposed to do — filed an accident report with the police, notified your insurance company, made a claim to the other driver’s insurance for your medical and car repair bills, and provided documentation of your injuries and damages. But now that insurance company is claiming the accident wasn’t the other driver’s fault at all, and they’re refusing to cover your costs.
When an insurance claim is denied, it’s natural to feel frustrated. You know what happened. Someone else caused your injuries and damages, and you shouldn’t have to battle a faceless corporation to be made whole. You suspect they may be trying to wear you down and hope you’ll go away so they don’t have to pay out any money. Insurance companies are after all, in the business of making profits.
You may not know where to turn when that denial letter arrives in your mailbox, but there are other avenues you can pursue with your claim. A consultation with a knowledgeable personal injury attorney may be enlightening. An attorney with experience handling insurance claim denials can evaluate the circumstances of your claim and discuss some options for proceeding. That may include appealing directly to the insurance company or filing a lawsuit.
Reasons a Claim May Be Denied
When your insurance claim is denied, the insurance company has to give you a reason for the denial. Common reasons for denial of claims include:
- Disputed Liability — The insurance company may say that their policyholder didn’t cause the accident, or that the accident didn’t cause the injuries or damages you’re claiming.
- Policy Exclusions — Insurance policies usually include a laundry list of items that aren’t covered. A lot of people have heard that an insurance policy won’t cover an “act of god,” for example. Another example is intentional actions, which often are not covered by insurance policies. The company may use one of those items on the list, known as exclusions, to say that your accident isn’t covered by their policy.
- Lapsed Policy — If the premiums hadn’t been paid at the time of the accident, the policy may have lapsed and the insurance company would say that no coverage existed at the time of the accident.
- Failure to Notify — Policyholders have an obligation to notify insurance companies of accidents in a reasonable amount of time after the accident happened. If that didn’t happen, the insurance company may claim it didn’t have an opportunity to investigate the accident and may deny the claim.
Duty to Act in Good Faith
When a policyholder purchases insurance, that insurance policy acts as a contract. The policyholder agrees to pay the premiums for insurance, and the insurance company agrees to pay claims unless one of the policy exclusions applies. Parties to a contract are required to act in good faith, which generally means that they enter into the contract with honest and sincere intentions. That means if an insurance company denies your claim, it is supposed to have a legitimate reason to do so. If the company knows its policyholder is at fault and no exceptions apply, and a claim is denied anyway, the company may be acting in bad faith, or in other words intentionally not fulfilling the company’s contractual obligations.
There are some actions under Illinois law that are considered improper claims practice. If the company that denied your claim performed any of these actions, listed in 215 ILCS 5/154.6, you may have a claim against the company for improper claims practice. A lawyer with experience handling insurance disputes can help you determine if one of these happened to you:
- The company misrepresented information about the policy or coverage
- The company failed to acknowledge communications about claims with reasonable promptness
- When liability was reasonable clear, the company did not in good faith attempt to settle claims
- There was no reasonable investigation, and the company denied your claim without having sufficient information
- The company tried to settle your claim for less than a reasonable person would think your claim was worth
Appealing Your Denial
Most insurance companies have a process for appealing a denied claim. An auto accident lawyer can help you pull together all of the evidence and documents you’ll need to address the reason for the denial and submit them to the insurance company on your behalf. Your lawyer can state your case for why your claim should be paid under the policy, and negotiate with the insurance company for a settlement. That process may include going to an arbitration of your claim, where each side presents arguments to an impartial third party and that person makes a ruling on the dispute.
Filing a Lawsuit
If the insurance company acted in bad faith, you may be able to sue the company for the improper claims practice. If you go this route, you’ll definitely want an experienced attorney by your side. Call us at (312) 236-2900 for a free legal consultation with Staver Accident Injury Lawyers, P.C.
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Staver Accident Injury Lawyers, P.C. can help you manage the paperwork, insurance adjusters, and defense attorneys so you can focus on your health and getting the appropriate treatment. Please call us today for a free legal consultation with one of our personal injury lawyers.
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