There are some common reasons your insurance claim may be denied. These include no-fault coverage, an expired insurance policy or excluded driver, or simply when the adjuster denies liability for their insured. No matter what reason you're given for a denial, you should always demand a written explanation from the claims adjuster.
If you're in an auto collision, and you live in a state where no-fault insurance laws are in effect, in most cases you won't be able to pursue a personal injury claim against the other driver. In no-fault insurance states, third-party drivers enjoy immunity from minor personal injury claims.
Instead, you'll file a claim with your own insurance company. Your insurer is obligated under the terms of your no-fault policy to reimbursement your medical bills, out-of-pocket expenses, and lost wages, regardless of who caused the accident.
If your damages exceed a certain amount, or you've met the serious injury threshold, you may be able to pursue a claim for pain and suffering. If you've been seriously injured however, you'll need an attorney. Serious injury cases are complicated, and there's too much at stake for you to handle the claim yourself.
In states with traditional fault laws, you have every right to pursue the at-fault driver for your damages. If your losses exceed the driver's insurance policy limits, you are legally entitled to sue the driver personally for the balance.
Get Written Confirmation
Never take the claims adjuster's word for it if she says your claim for pain and suffering is denied under no-fault provisions. Demand a letter from her explaining why she's denying your claim.
Even if the reasons seem obvious, you should always have a denial sent to you in writing from the insurance company. If you later learn the adjuster's denial was wrongful, the letter is strong evidence for a potentially lucrative bad-faith lawsuit against the company.
In traditional fault states, a legitimate claim can be denied if:
Unfortunately, there are people out there driving without insurance. These may be drivers who had legitimate insurance coverage at one time, but their policies expired when they didn't pay their premiums. While it's technically illegal to drive without insurance, in most cases the only penalty is a stiff fine and/or suspended license.
You may not find out the driver's policy was expired until after you file your claim with his insurance company. Days after filing your claim you may receive a telephone call or letter stating there's no insurance in effect.
Even though an at-fault driver may produce a seemingly valid insurance card, it's possible his coverage was recently canceled. There may have been an overlap between the time the driver failed to pay his policy premiums, the cancellation for non-payment, and what his insurance card shows as the expiration date of coverage.
A claim can also be denied if the at-fault driver was not covered by the policy. The insurance company may say that although the policy covers most family members, or those explicitly allowed to drive the car by the policyholder, the at-fault driver wasn't covered because he was excluded from the policy.
In states with traditional fault laws, victims of automobile collisions can be taken advantage of by another tactic of unscrupulous adjusters. If damages exceed the policy limits carried by the at-fault driver, the adjuster may deny the claim due to "insufficient coverage."
Insufficient coverage means the at-fault driver doesn't have enough insurance to cover all of the damages. It does not mean he doesn't have enough to pay for most, or at least part of them.
If your damages exceed the limits of the at-fault party's insurance coverage, the adjuster should do what is referred to as "tendering policy limits." That means they give you all the money available under their insured's policy. You are then usually free to file a lawsuit against the at-fault driver personally to recover the difference.
This may seem basic, but many adjusters get away with this tactic by wrongfully denying legitimate claims. Victims may be forced to attempt reimbursement for their losses from their own insurance companies, or forego any compensation at all.
If your damages exceed the at-fault party's insurance coverage, tell the adjuster to tender policy limits and that you'll accept their maximum payable amount. If he won't, and insists on denying the claim based on insufficient coverage, demand a written confirmation of the denial.
Keep in mind, if your damages exceed the driver's policy limits, you should have an attorney handling your case. It's likely too serious for you to go it alone.
Your claim may be denied for a legitimate reason. Whether you reside in a no-fault insurance state, or a traditional fault state, if you feel your claim was wrongfully denied, you should seek the counsel of an experienced personal injury attorney in your area.
Most reputable attorneys won't charge any fee for an initial office consultation, and if your case goes forward, you won't have to pay anything unless the attorney wins your case.
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