When you’re involved in a car accident or motorcycle accident and another driver is to blame you have the right to recover compensation. If that other driver is insured, you’ll probably turn to their insurance company for help. Insurance exists to make sure that accident victims are covered should an accident ever occur. However, insurance companies don’t like to pay out on claims. In fact, it’s not uncommon for insurance companies to deny claims after an accident.
You may have a lot of questions if your insurance claim has been denied after an accident. Is it legal for insurance companies to deny a claim? Why would a seemingly legitimate claim be denied? What options do you have when your insurance claim is denied? Our attorneys answer these questions and provide some information that can help you get the money you deserve.
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Insurance Companies Must Act in Good Faith
Drivers in California are legally obligated to purchase car insurance for any vehicle registered with the state. A contract between the insured driver and the insurance company exists when a policy is purchased. The terms of the policy essentially say that the insurance company will cover the cost of damage, up to a certain amount, if the driver pays his or her premiums on time.
In California, an insurance company has a legal duty to act in good faith in regard to this contract. This means that an insurance company cannot do anything to “unfairly interfere” with a claim or deny a claim without providing a reasonable justification. In other words, insurance companies must make a genuine effort to review insurance claims honestly and with good intentions.
So, it’s illegal for insurance companies to deny an insurance claim in bad faith. If your claim is denied, you have the right to ask for the reasoning behind that decision. If the company can’t provide a legitimate or reasonable excuse, you may have the right to file a bad faith claim.
Reasons Insurance Companies May Deny an Insurance Claim
Insurance companies don’t make money when they pay for damage caused by their insured drivers. It’s not in the company’s best interest to pay out on a claim. However, insurers do have an obligation to act in good faith. Over the years, insurance companies have devised strategies and tactics that can allow them to lawfully deny claims.
You Didn’t Submit a Timely Claim
The amount of time you have to file an insurance claim after an accident will depend on a number of factors, including the company you’re dealing with and the extent of your injuries. However, companies can reserve the right to deny your claim if it is not submitted within a “reasonable” amount of time after your accident.
What is a reasonable amount of time? Most companies don’t have arbitrary deadlines. In some cases, reasonable could mean days. In other cases, reasonable could mean weeks. It will really depend on the circumstances of your specific case.
It’s important to notify an insurance company of your intent to submit a claim as soon as you can after an accident. Your initial claim actually isn’t your demand for compensation. You’ll have the ability to draft and submit a demand letter which outlines your request for money. This demand letter can be submitted after your initial claim.
Liability Is Disputed or Unclear
An insurance company is only going to pay you if it is clear to them that their driver is to blame. If the company has any doubts about liability or fault it will probably deny your claim.
This is also true if the insurer believes that you share fault for the accident. In California, fault can reduce your ability to recover compensation. An insurance company will want to shift as much of the blame onto you as possible. The company may deny your claim and explain that there’s no clear indication that their driver is at fault.
Insurance Coverage Lapsed
Insurance companies only have an obligation to pay for damage caused by a driver if that driver holds a valid insurance policy. A policy will only be valid if the driver satisfies his or her contractual obligations. An insurance policy will lapse if an insured driver does not pay his or her premiums on time. If a policy lapses, an insurance company will deny claims submitted by accident victims.
Policy Exclusions
Insurance policies typically contain a list of things that an insurance company will not cover. These are known as policy exclusions. Your insurance claim can be denied if the damage you’ve suffered falls under a policy exclusion. For example, an insurance company may deny a claim if the damage was caused by intentional acts of a driver or an “Act of God.”
Driver Exclusions
Vehicles registered in the state must be covered by a valid insurance policy. However, having insurance doesn’t necessarily mean that all drivers of a particular vehicle will be covered by the policy. Many policies contain something called “named driver exclusions.” This simply means that a valid insurance policy exists, but that specific drivers are not covered. The insurance company can deny coverage for damage caused by those excluded drivers.
Bad Faith
Yes, insurance companies are prohibited from acting in bad faith. However, this doesn’t mean that all companies and all adjusters act in good faith at all times. It is quite possible for your claim to be denied in bad faith.
You Still Have Options If Your Insurance Claim is Denied
Don’t panic if your insurance claim has been denied. You still have options available to you. It can be helpful to discuss your options and the best strategy for your specific situation with an experienced attorney.
Appealing the Denial
Insurance companies can’t unilaterally decide to deny your claim and also prevent you from having any recourse. You have the right to appeal the decision to deny your insurance claim after an accident. An appeal is a formal request to have a specific decision reviewed. If an appeal is successful, your claim can either be (a) reopened for consideration or (b) approved.
Internal Appeals: The appeals process will really depend on the company handling the insurance claim. Some insurers prefer to keep appeals in-house. In these situations, you’d submit an appeal to a specific appeals department within the insurance company. The decision to deny your claim would be reviewed by the insurance company itself.
Arbitration: Other companies prefer to have appeals handled by a neutral third party. In fact, some policies explicitly state that any appeals and disputes must be arbitrated. Arbitration is a way to resolve disputes privately with the assistance of a neutral third party. The process itself is very similar to what you would expect from going to court. Both parties present their arguments to a person presiding over the case. This person, known as the arbitrator, considers all relevant information before making an informed decision. The arbitrator’s decision is final.
Filing a Personal Injury Lawsuit
You don’t have to rely on an insurance company to get the money you need after an accident. You also have the right to file a lawsuit if the other driver’s negligence caused your injury. You may want to consider filing a personal injury lawsuit if:
- An insurance company has denied your claim without reasonable justification
- An insurance company has refused to extend a fair settlement offer
- More than one person contributed to your injury, or
- The extent of your injuries and damages exceeds insurance policy maximums.
If you’re thinking about filing a lawsuit it’s important to speak with an attorney. Personal injury cases can be complicated and overwhelming. Your attorney will make sure that your rights are protected and that you have every opportunity to demand the money you deserve.
Has Your Insurance Claim Been Denied? Call Our San Diego Attorneys For Help
Has your insurance claim for benefits been denied after a San Diego car accident? Don’t panic. You still have options for recovering the compensation you need. The option that’s best suited for your case will depend on why your claim was denied. Contact Injury Trial Lawyers, APC to speak with our experienced legal team. Our San Diego personal injury lawyers will carefully review your case and determine the best strategy moving forward. Our goal is to help you get the money you deserve. Call to schedule a free consultation and learn more today.