What to Do When Car Insurance Denies Your Claim


Car insurance companies can, and will, deny your claim. If your claim is denied, though, you can appeal it – the options range from simply providing more documentation to filing a lawsuit.

You’ve been injured in a car accident, and it’s obvious to you the other driver was at fault. Unfortunately, that doesn’t mean the insurance company will agree, or even if it does, pay a claim.

Reasons car accident claims are denied can range from not filing correctly or on time, to complicated issues to do with coverage. Even if you are at fault, or live in a no-fault state, and are filing a claim with your own insurance, there are many reasons it may be denied.

You can help your case by documenting everything at the scene, getting a police report, understanding your coverage, and following the claims process correctly. If your claim is denied, even after all that, you can seek arbitration, or even go to court.

Understanding why the claim was denied and tackling any issues is the first step toward turning a denial into a settlement, but it’s not an easy process.

Can Car Insurance Companies Deny a Claim?

There is never a guarantee a car insurance company will approve your claim. If you make a first-party claim – that’s a claim with your own insurance company – it’s less likely to be denied. You’d do this if you were at fault or live in a no-fault state and are making an injury claim with your personal injury protection (PIP) insurance.

Third-party claims – those made against the other driver’s insurance policy – are more likely to be denied.

We’ll go into more detail a little later about the specifics of why claims may be denied, but in general, your claim has more chance of success if you take all the right steps, beginning at the accident scene:

  • Take photos of damage as well as the scene itself
  • Call the police, and be sure to get a police report
  • Get contact information for any witnesses who can support your version of events
  • Don’t be overly talkative or apologetic at the scene and don’t post photos and opinions on social media
  • Call your insurance company as soon as possible
  • Seek medical attention as soon as possible for any injuries
  • Find out ASAP what documentation you need and what the deadlines are for filing a claim

» More About: What to Do After a Car Accident

What Happens If Car Insurance Denies Your Claim?

You will be notified in writing if your claim is denied, and the denial will include the reasons. If it doesn’t have that, contact the insurance company and ask for a written document detailing the reasons. (Tip: It’s always good to get things in writing, rather than have a verbal discussion. Writing will always be there – memories of a discussion can fade or differ).

This doesn’t mean that you won’t get a car accident settlement, it just means you’re going to have to fight harder for it.

The first thing you should do is review the reasons the claim was denied. If they’re not detailed enough or don’t seem correct, call the insurance company and ask for clarification.

If it was a third-party claim, notify your insurance company, and they may make a claim on your behalf.

Whether it’s a third-party or first-party claim, if your claim is denied, you can appeal it.

How to Appeal a Car Insurance Claim Decision

Once you’ve read the claim denial letter and understand why your claim was denied, you can take steps to appeal it.

Before you do, contact an attorney. An experienced personal injury attorney can review your claim and information and has the experience to make a case for you. Find an attorney who works on contingency – they don’t get paid unless they win your case.

“Accident injury plaintiffs have a much higher rate of success in recovering compensation from the responsible party when they have legal representation,” Don Wruck, founder of Wruck Paupore PC Injury Firm, said. “Further, if the insurance company sees that a claimant does not have a lawyer, they may try to make low-ball settlement offers or issue frivolous denials of claims.”

An attorney can handle all of the communication with the insurance company and related procedural tasks.

Either your attorney, or you if you choose to do it yourself, will then take the following steps. Any one of these steps may result in a settlement:

  • Contact the insurer: Notify them that you disagree with the denial and will be appealing. If you believe it’s a misunderstanding, or simple lack of a document that can be resolved, let them know.
  • Appeal the denial: Find out if your insurer has a specific appeals process and follow it.
  • Put it in writing: Write a letter (often called a “demand letter”) to the insurance company that spells out your case. Be specific and professional, addressing the reasons for denial and why you disagree. Include any documentation. Send it to the head of the claims department or consumer complaint division if there’s no information on the denial letter that says where to appeal.
  • Consider arbitration: If a simple appeal isn’t successful, check your insurance policy to see if it has an arbitration option. If it does, contact an arbitrator through the American Arbitration Association if your insurance company doesn’t suggest one.
  • File a lawsuit: If none of the above results in a settlement, going to court is your only option.

If you believe the denial was in “bad faith” – the insurance company didn’t give you a reason, it didn’t investigate or is ignoring information – contact your state insurance department. This is another instance, though, when an attorney can fight effectively for you.

Why Would Car Insurance Deny a Claim?

There are many reasons an insurance company may deny a claim, and if they can find one, most will take advantage. When you file a claim, make sure you do everything accurately and adhere to deadlines, since filing errors can mean a denial.

Some of the top reasons claims are denied are:

  • The at-fault driver’s policy lapsed.
  • The amount of the claim exceeds the insurance allowance.
  • Waiting too long to seek medical attention.
  • Injuries or damage was pre-existing.
  • You, not the other driver, are at fault.
  • The driver or vehicle isn’t covered by insurance.
  • The accident was reported too late.
  • The claim was made too late.
  • There is no police report supporting the claim.
  • The claim contains errors of fact or untruths.
  • The damage isn’t covered by insurance (more likely for a first-party claim if you don’t have comprehensive insurance.
  • Providing false information when you bought the insurance.

Accident attorneys know how to fight against claims that are denied. It is prudent to at least get a free consultation on the matter, review the options the attorney presents, and then make the decision on whether to hire a lawyer to appeal your denied claim.

Maureen Milliken

Maureen Milliken has a three-decade career as a journalist at daily newspapers and publications that focus on business and consumer finance. She covered several beats during her newspaper career, including local and state news, features on prominent public officials and several years running a sports department. She is a subject expert on topics that include consumer debt, consumer credit, labor issues, financial abuse, rural development, and legal matters resulting from accidents in the workplace and on the roads. She is adept at presenting complicated topics in an easy-to-read format that helps readers understand the topic's impact on their lives … and their pocketbooks!


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