You weren’t shocked the driver who rear-ended you was tooling around without car insurance. You know there are uninsured drivers on the road.
You weren’t too worried about what that would mean for you, either. After all, you’re a responsible driver with solid auto insurance coverage from a reputable insurance carrier. So it shouldn’t matter that the driver who hit you wasn’t insured.
At least that’s what you thought until your insurance company denied your claim. Now, you’re out a couple thousand dollars in repair costs with no clear path to recover them. Your finances will take months to recover — and that’s assuming no other nasty surprises emerge in the meantime.
What to Do if Your Car Insurance Claim Is Denied
If your auto insurance company denies your claim, it’s possible to get it to reconsider and reverse the decision — but by no means guaranteed.
Your chances of success depend on the details of your policy, the reason for the denial, and the strength of your appeal. If you’re willing to enlist a third party like an insurance attorney or your state’s insurance commission, your case could be stronger, though you may have to pay for the help.
Follow these general steps to evaluate your claim denial, decide what to do next, and pursue your appeal if you decide to make one.
1. Understand the Common Reasons for Insurance Claim Denial
First, arm yourself with knowledge.
Car insurance companies deny claims for various reasons. Knowing why the insurance company denied your claim can help you determine what you can do about it.
Your Insurance Policy Has Lapsed
If your insurance policy lapses because you didn’t pay your premium on time, your coverage goes away. If you get into an accident before reinstating your policy or getting a new one, you’ll be responsible for any expenses arising from it, and your insurer will be within its rights to deny your claim.
Your Claim Is Higher Than the Coverage Amount
If you get into a serious accident, your insurance company might partially deny your claim because you don’t have enough coverage.
For example, if you’re at fault for an accident that causes $50,000 in property damage but your policy limit is $25,000 for property damage liability coverage, you’re personally liable for the remaining $25,000.
That doesn’t necessarily mean you have to pay $25,000 out of pocket. However, if the party who suffers the loss sues you, your insurance company won’t pay the damages if you lose.
Your Claim Isn’t Covered at All
Depending on your insurance policy details and what types of coverage you have, you might find the type of claim you file isn’t covered by the policy at all.
For example, if you drive your car into a tree and total it, you’d expect the loss to fall under your policy’s collision coverage. However, collision coverage is optional, and if you’ve been trying to keep your premium low, there’s a good chance you don’t have it.
The Driver Is Specifically Excluded From Coverage
Auto insurance policies’ collision and comprehensive coverages generally cover vehicles rather than individual drivers. That’s a good thing if you routinely let other household members drive your car.
But what if you really don’t want a particular person driving your car — say, your impulsive 18-year-old son? You can significantly reduce your insurance rate by excluding them from the policy.
That works out well until your genius son decides to “borrow” your car for a joyride with friends. If said joyride ends in a ditch, expect a big “tough luck” from your insurer.
The Insurance Company Suspects Fraud
If the insurance claims adjuster assigned to your claim believes you’re not being truthful — or that your claim is an outright fabrication — then don’t expect them to approve it. Depending on the circumstances, you could be criminally liable for insurance fraud, though it’s more likely your insurer will simply deny your claim.
The Driver Was Operating Unlawfully
If the person driving your car was breaking the law in any way, your insurance company has grounds to deny your claim. That includes but isn’t limited to:
- Driving your car without your permission
- Driving under the influence of alcohol or drugs
- Operating recklessly
You Didn’t Seek Medical Attention Right Away
The longer you wait to seek medical attention for injuries sustained in your car accident, the more suspicious the insurer will be. Any delay gives them grounds to argue the accident didn’t cause your injuries.
There’s No Good Reason for the Denial
Wait a second. If there’s no good reason to deny it, shouldn’t your insurer approve your claim?
You’d think. But sometimes insurance adjusters get it wrong — willfully or not. A denial without good cause is known as a “bad faith” denial, and it’s grounds for an immediate appeal.
2. Review the Insurance Company’s Denial Letter
In all likelihood, the reason your auto insurance carrier denies your claim will come down to one or two specific issues with your claim.
To understand them, carefully review your insurance carrier’s denial letter. Read the entire thing, paying particular attention to the reasons for the denial. These should be spelled out in plain English (or something close to it).
If you agree with the insurance company’s reasons for denial, there’s no need to take further action. Perhaps you filed your claim before realizing the accident wasn’t covered — it happens.
More likely, you’ll disagree with the insurance company’s reasoning. In that case, it’s time to begin crafting your appeal.
3. Gather Documentation
Next, gather any documentation you believe will support your appeal. That can include but isn’t necessarily limited to:
- Photos and videos of the scene of the accident
- Photos and videos of the damage to your vehicle
- Repair estimates or bills
- Medical bills or explanations of benefits
- Bills for other expenses related to the incident, such as towing or roadside assistance
- The police report on the incident
- Witness statements
- Insurance and contact information for other parties involved
- Notes you took about the incident, such as what you were doing at the time of the accident
It’s OK to resubmit documents you already sent the insurance company with your claim, but new information is even better. For example, if the initial repair estimate turned out to be low and you submitted your claim before receiving a more accurate revision, submit the new estimate with your appeal.
4. Write an Appeal Letter
Next, write an appeal letter that addresses the reason or reasons for your denial in detail.
In your letter, explain why you included each piece of information and how it relates to your claim. Reference specific coverages and exclusions in your policy wherever possible, and go into as much detail as you can.
For example, don’t merely say, “The police report says the other driver was at fault.” Instead, say, “The police report states that the at-fault driver ran a red light and hit the vehicle I was driving, which had the right of way.”
Your letter should also make specific requests of the insurance company beyond simply asking them to reconsider the denial. For example, if you believe your insurance adjuster didn’t consider all the facts of the case or denied your claim in bad faith, ask the insurer to replace them.
5. Bring in a Third Party if Needed
If the insurance company denies your appeal yet again or you want to strengthen your case before filing it, bring in a third party to assist you.
You have two options: your state’s insurance department or a private car insurance lawyer. You’re free to choose both, and given how long it can take state insurance departments to work, that might be a good move.
Contact Your State’s Insurance Department
This move isn’t to be done lightly. Your state’s insurance department, also known as an insurance commission, is an overworked bureaucracy that routinely deals with multimillion-dollar insurance disputes. Individual drivers with four- or five-figure auto insurance claims are small-fry in comparison.
On the other hand, insurance commissions exist to protect consumers and businesses from bad-faith dealings by insurance companies. Get them involved if you believe your insurer knowingly denied a valid claim or isn’t considering the new evidence you submitted with your appeal.
Every state is different, but you should be able to file your dispute through the department’s website. You’ll receive emailed or snail-mailed confirmation the department is investigating. As your case moves forward, be prepared to provide the same evidence you included with your appeal and sit for interviews with investigators.
Be aware that your complaint might not be the only one involving your insurance company. It could prompt or be folded into a larger investigation into the company’s practices. These investigations can eventually result in sizable settlements for those involved, but they typically take years to unfold, so don’t hold your breath waiting for compensation.
Hire a Car Accident Lawyer
You can also hire a lawyer who specializes in helping drivers fight denied claims. They’ll help you navigate the initial claims process if needed, prepare your appeal, communicate directly with the insurance company, and file a lawsuit if all else fails.
Bringing in a law firm makes more sense when the insurer denies your claim outright and refuses to pay a dime. That’s because your lawyer will most likely work on contingency. They’ll get a hefty percentage of any settlement or award — generally 33% to 40%.
Getting something is better than nothing, but your total return on investment will be higher if you were in danger of getting no payout at all.
A denied car insurance claim isn’t just an inconvenience. It deprives you of compensation you expected to receive — compensation you were counting on to cover accident-related expenses. It can do serious damage to your budget, which could in turn harm your credit score and trap you in a vicious cycle of financial woe.
So if you believe your car insurance company wrongly denied your claim, it could be worth the effort to appeal.