It is not unusual to hear from relatives and friends that their insurance companies ripped them off. They got into an accident, filed a claim, and received a rejection slip. Dealing with an insurance company can be a frustrating experience. All your words will fall onto the deaf ears of anyone who is behind the insurance office desk.
Also, chances are that you do not know of any car accident lawyer to help you. And this is fine. Most people don’t shop for accident lawyers before they get into an accident – after all, accidents are unpredictable and nobody really expects them to happen.
Before we discuss what to do if your insurance company denied your clam, let us take a look at the most common reasons why claims are denied.
- You have the wrong kind of insurance. Insurance terms can be confusing. Make sure that what you purchase covers what you expect. There is a difference between collision coverage and comprehensive insurance. Some insurance companies have separate policies for bodily injury and acts of God such as storms, earthquakes, and floods.
- You are not listed as part of the policy. In some states, only the principal policy holder is entitled to an injury claim. If you intend to have an insurance that covers all passengers, clarify this with your agent.
- You are lagging behind on your bills and this invalidated the insurance policy. Insurance companies always put this in small print. Read every word in your policy and understand how many months you are allowed to miss before the company terminates your policy.
- The claim cost exceeds the limitations of your policy. In this case, you should still receive the full coverage amount of the insurance. And then you will have to take care of the excess cost, unless you have other sources of financial assistance. Some companies, however, will deny the entire insurance claim, which is tantamount to fraud and bad faith.
To fight a claim denial, the first thing to do is to keep yourself informed. The right knowledge arms you with the right tools to deal with a tricky situation like this.
Write a Formal Letter to the Company
The content of your letter should be clear. It should say that you are disagreeing with the decision. In your letter, you must include your name, policy number, the reference number of the rejection slip, if any, and the complete details of the crash. Include police reports and pictures if you have them. Never give out original documents as they may get lost in the mail.
The body of the letter should argue that you are contesting the rejection. It should contain some provisions from the insurance policy explaining why their decision is wrong. The tone of the letter must be strong, not timid.
At the end of the letter, make sure you state that you are waiting for a favorable response and that if they do not take your claim into consideration, you will contact a car accident lawyer and take legal action against the company. Make a photocopy of the letter you sent.
Inform the State Insurance Commissioner
Every state has this office to ensure that consumers are protected against unscrupulous companies. In your letter, explain politely that you were denied a claim and subsequently wrote to the company and got another rejection.
The body of the letter should also explain your justification for getting the claim. Attach a photocopy of the first letter you sent, including all documents that came with it, and a copy of your second rejection slip or letter from the insurance company. Provide your address and phone number where the state office can reach you.
File a Bad Faith Insurance Lawsuit
This is where a car accident lawyer would come in. A lawyer will review you case, your insurance policy, and determine the best steps to take. In most cases, the lawyer will file for a breach of contract if there is a clear violation of any stipulation in your insurance policy. The lawyer will also determine the specific laws violated according to your state. The current condition of your injury, and your medical records, will be checked and used to sue the insurance company. If you win, you may also get compensation for moral and punitive damages.
Typically, lawyers for insurance claims will charge you a contingency fee instead of billing you hourly. This means that the attorney will get a specific percentage of what you are awarded after the trial. Usually, lawyers will ask somewhere between 20% to 40% of the gross proceeds of the insurance claim. Make sure you ask if this percentage applies before or after taxes. If you are awarded $100,000, the lawyer gets somewhere between $20,000 to $40,000.
Do not rush into selecting a lawyer. Make sure you know the lawyer’s background and that upon consultation, he explained to you the likelihood of winning or losing your lawsuit. Choose carefully and clarify all fees that the lawyer requires.
Last Updated: 03-24-2017