After a car accident, numerous expenses can lead to significant financial difficulties for you and your family. Insurance companies denying your claim can make an already difficult situation even more complicated. So, what happens when your insurance claim is denied? Keep reading meaningful insight from our car accident lawyers in San Diego to learn everything you need to know about claim denials and your options.
Why Insurance Companies Deny Claims
Insurance companies are businesses, and as such, they prioritize their bottom line. Unfortunately, while the general public relies on insurance to protect them in emergencies, providers seek any reason to withhold that protection. When you’ve been in an accident, and the at-fault driver’s insurance refuses to pay you, they will typically cite one of the following reasons.
Liability Disputes
One of the most common reasons for a claim denial is disputed liability. The insurance company can argue that their policyholder is not responsible for the accident or that you share liability. In states like California, where comparative negligence principles apply, your compensation can be reduced by the percentage of fault assigned to you.
The insurance company reduces its financial burden by shifting the blame to you. They may also push to assign you an unfair liability amount, even if their arguments are inaccurate and their proof is minimal. They will try to misrepresent facts to transfer their client’s liability to you if possible.
Insufficient Evidence
Inadequate evidence is a commonly cited reason for refusing to pay an accident victim. Insurance companies are known for requesting increasingly vague evidence that has no bearing on the case. Failing to provide specific pieces of evidence can lead to arguments of insufficient evidence and subsequent claim denials.
Policy Limits
Your claim amount may exceed the at-fault driver’s policy limits, leading the insurer to either deny the claim outright or offer a lower amount that doesn’t cover your damages. Should the at-fault driver’s policy limit be too low, you may need to sue them directly to secure adequate compensation.
What to Do if the Other Driver’s Insurance Won’t Pay
If your claim is denied, it does not mean you are out of options. Compensation is the most important source of financial support and security. It is essential to continue fighting for yourself to defend your rights and receive the compensation you’re entitled to after a car accident.
Scrutinize the Denial Letter
After a claim denial, your first task is to review the denial letter. This letter will contain a breakdown of the reasons why the insurer has chosen to deny your claim. Discuss the reasons with your attorney so you can plan to appeal their decision.
Arrange Arbitration
In some scenarios, the next step will be arbitration to resolve all disputes. Arbitration is a private, less formal method of resolving disputes than going directly to trial. In arbitration, both parties must agree to a third-party arbitrator to examine each side’s claims and arguments to make an unbiased decision. The decision made in arbitration is binding, so the insurer may refuse to participate.
File a Complaint
When the insurance company engages in bad-faith tactics or refuses to cooperate with arbitration, you may choose to file a complaint with the California Department of Insurance. In our experience, filing this complaint often puts enough pressure on the insurer to reevaluate its decision to deny your claim.
When to File a Lawsuit
You may be able to proceed with separate legal action against the insurer if you believe your claim is being handled unfairly. If the insurance company denies your claim without good reason, doesn’t investigate, delays unnecessarily, or offers an unreasonably low settlement, you can file a lawsuit.
If your bad-faith lawsuit succeeds, you may be awarded additional compensation for the original accident claim. You may also receive punitive damages specifically intended to punish the insurer for its behavior towards you. Punitive damages are also designed to signal that similar actions will not be tolerated.
Work With an Expert
Fighting with insurance companies for the compensation you need to move forward after an accident can be draining. It can put you in an impossible position if you are still recovering from injuries. However, when you work with an attorney, they can minimize the pressure on you and handle the admin, negotiations, and legal minutiae on your behalf.
At HHJ Trial Attorneys, we understand the emotional toll a denied car accident claim can take on you and those who rely on you. We utilize our years of experience with insurance companies and extensive knowledge of the legal system to fight for you. Our goal is to defend victims who are exploited and manipulated.
Contact HHJ today to book a free consultation so we can discuss possible strategies for refuting unfair claim dismissals. You don’t have to face this process alone with limited knowledge of the law; we are professional legal experts who will prioritize your future and financial security after a car accident.
