What To Do If an Insurance Adjuster Denies Your Claim: Respond With Confidence

When negotiations fail or the insurance adjuster denies your claim, you have options. Here’s how you can still pursue injury compensation.

Most injury claims are settled out of court by negotiating directly with the insurance adjuster.

Severe or complicated injury claims are usually handled by the victim’s attorney. However, plenty of less serious claims are successfully resolved without an attorney.

Even when you do everything right, personal injury claims are not easy to settle. If you’re having trouble getting a decent settlement, or your injury claim is rejected, you have other options for pursuing fair injury compensation.

Why the Adjuster Might Deny Your Claim

Let’s assume you’ve done your homework. You’ve learned about the claims negotiation process and calculated what your injury claim is worth. You have every reason to expect a fair settlement of your claim. Still, your claim may hit a brick wall.

Some claims adjusters will deny an insurance claim with no room for negotiation.

Common reasons an adjuster might give for denying an accident claim:

  • Your claim isn’t covered by the insurance policy
  • You’re to blame for causing your injuries
  • Your injuries weren’t caused by the incident
  • Your injuries are a pre-existing condition

If your claim wasn’t denied outright, but you’ve gone back and forth with the adjuster without making any headway, you might still need to consider other options.

When Claim Negotiations Break Down

Imagine you’ve submitted a settlement demand packet to the insurance adjuster, including supporting evidence of your losses, and are ready to patiently negotiate your claim. Then it all falls apart. What happened?

Indications of failing negotiations include:

  • The adjuster ignores your letters and telephone calls
  • The adjuster is unreasonable, condescending, or just plain mean
  • The adjuster is making unreasonable demands for medical records and other documents you don’t have or already provided
  • The adjuster won’t come off an unreasonable lowball offer
  • The adjuster continues to delay your claim, waiting for the statute of limitations to expire

Each state has laws requiring the insurance company to act in good faith. Unreasonable delays and demands by the claims adjuster border on bad faith tactics.

How to Respond to a Claim Denial

If your claim is flatly denied, the insurance company should notify you in writing. The denial letter should clearly state the basis for the denial. Don’t get angry, or respond with curses or name-calling.

An appropriate response is to ask the adjuster what they need to reopen your claim. Sometimes they will reconsider the denial if you can provide additional information or evidence. For example, if the at-fault driver’s insurance company asserts the car crash was your fault, you can provide a copy of the police report that proves otherwise.

When your claim hasn’t been explicitly denied but the adjuster is unreasonable or ignoring your calls, try contacting their superior. Be calm and polite while explaining the adjuster’s failure to respond to calls, etc., and express your desire to reach a reasonable settlement.

Your claim might have landed on the desk of an adjuster who is overwhelmed or out sick. Sometimes they’re just plain lazy. Calling the claims manager could jump-start negotiations.

Avoid the temptation to set hard deadlines or threaten a lawsuit unless you intend to follow through.

Factors That Impact Your Options

Your available options depend upon the extent of your injuries, the costs of your damages, and whether you’ve filed the injury claim with your own insurer, called a “first-party” claim, or against the at-fault party’s insurance, called a “third-party” claim.

First-party injury claims are filed under your own auto insurance policy. Common first-party injury claims are made under:

  • Personal Injury Protection (PIP) coverage
  • Medical Payment (Med-Pay) coverage
  • Uninsured (UM) or Underinsured Motorist (UIM) coverage

It’s important to read your insurance policy carefully. It is a legal contract between you and the insurance company. Many policies have language intended to limit your options if you disagree with the way your claim is handled.

Don’t let the policy language stop you from talking to a personal injury attorney. Depending on the facts of your case, you may have more insurance coverage than you think, especially if your insurer failed to handle your claim in good faith.

Third-party injury claims are filed against the at-fault party’s insurance policy. Common reasons for third-party claims include:

  • Car accidents
  • Slip and falls
  • Dog bites
  • Other injuries on property

Don’t Wait to Talk to an Attorney

You always have the option of consulting an attorney at any point in the claims process, no matter whose insurance company you’re dealing with.

Most personal injury lawyers offer a free initial consultation. There’s no obligation, and you can talk to attorneys from more than one firm to find one that’s a good fit for your situation.

Even if your injury claim is for a relatively small amount, you are still better off talking to an attorney about your options. It might not be worth the expense of hiring an attorney, but you’ll still get good advice during your free consultation.

If you decide to hire an attorney to help with your case, the attorney won’t get paid unless your case settles. It’s amazing how fast some claims adjusters will offer a fair settlement once an attorney is involved.

Mediation: Help With Negotiations

Alternative Dispute Resolution (ADR) is a phrase used to describe methods of resolving a conflict before litigation. The most common ADR methods are mediation and arbitration.

Mediation is a process by which you and the insurance company both agree to have a neutral party, called a “mediator,” help resolve your settlement dispute. The mediator’s fee must be shared equally by you and the insurance company, and unless you and the company agree to accept the mediator’s decision, it’s non-binding.

Many insurance carriers won’t agree to mediation for minor personal injury claims. It’s simply not cost-effective for them to pay towards settling smaller claims.

If you have a no-fault insurance policy with a clause permitting you or the insurance company to request mediation, asking for it may convince the adjuster to settle your claim.

Although you can have a lawyer with you, it’s not required. You can be sure the insurance company will bring a lawyer to the mediation.

What happens in a mediation?

The mediation process begins when you and the insurance company agree on a mediator. A mediator should be a neutral, unbiased person who is not affiliated with you or the insurance company.

You can find lists of qualified mediators online, or you can check with your local court for help finding mediators.

Examples of state-run mediation resources include:

By process of elimination, you and the insurance company will settle on one mediator to hear your dispute.

Normally, the mediator’s fees must be paid in full before the mediation takes place. Some will accept a partial amount to begin and the balance at the conclusion.

The mediator’s job is to interpret the information from both sides and help prompt a settlement everyone can live with. The process is informal, without the rules of evidence used in court cases.

The mediator will listen to your side of the story, then present your demands to the insurance company, then vice versa. The mediator will continue going back and forth between both parties trying to reach an agreement.

A successful mediator eliminates as many roadblocks as possible and works out a mutually agreeable settlement. You and the insurance company will sign a written copy of any agreement you make.

If you don’t settle at mediation, you usually still have the right to file a lawsuit.

Arbitration: Hiring Someone to Decide Your Claim

Arbitration is similar to mediation in that a neutral party, called an “arbitrator,” is brought in to help resolve the stalemate between you and the insurance company.

The difference is, instead of helping both sides come to an agreement, the arbitrator will listen to arguments from both sides and make a decision. Also, the arbitration hearing is more formal than mediation.

Depending on the arbitration agreement between you and the insurance company, the decision can be binding or non-binding:

  • Binding arbitration means both sides must live with the arbitrator’s decision. There is no appeal.
  • Non-binding arbitration allows either side to take further action, like a lawsuit, if they don’t agree with the arbitrator’s decision.

Arbitration is the most demanding method of alternative dispute resolution. Certain aspects of the arbitration agreement must be negotiated before the actual process can even begin. It’s advisable to have an attorney on your side to help you with the specifics.

Contract Arbitration Clauses

If you’re in a stalemate with your own insurance company, you may have no choice but to arbitrate the dispute. The right to call for arbitration is often written into your insurance policy. The arbitration clause likely states that either party has the right to have a contested matter arbitrated.

In other words, if your claim negotiations have failed, you have the option of asking for arbitration. If you want to arbitrate, tell the adjuster and follow up with a written request for arbitration.

The request alone may be enough to get the adjuster to settle. Like mediation, the costs of arbitration can be high, so settling the claim is often in everyone’s best interest.

Learn about participating in arbitration without an attorney from The American Arbitration Association.

Filing a Lawsuit Against the At-Fault Party

Lawsuits, even in small claims court, are always filed against the at-fault party, not their insurance company. But most insurance companies have a “duty to defend” their insured, meaning the company will pay for an attorney to represent their insured, even in small claims court.

Suing in Small Claims Court

If you’re handling your own minor injury claim and negotiations fail, filing a lawsuit in small claims court may be the perfect solution. Small claims court procedures are simplified, and the fees are more affordable than higher courts.

Small claims courts are designed to settle disputes without the need for lawyers. But the maximum monetary award limits are relatively low. Award limits are usually between $2,500 and $6,000, but can be as high as $25,000. The specific amount depends on state laws.

Most states allow you to bring an attorney to small claims court, although you might not find an attorney willing to take such a small case on a contingency fee basis.

Small claims trials can take anywhere from a few minutes to a couple of hours. If you win, the insurance company will be ordered to send you a check. It will include the verdict amount and reimbursement for your filing fees.

Can you get a nuisance value settlement?

The insurance company might also be willing to offer a nuisance value payout to get rid of your claim. This type of settlement is paid by the company when they think it’s easier and less costly than continuing to deal with your case.

Carefully consider any settlement offers. There’s no guarantee you’ll win in court.

Litigating High-Dollar Cases

Some types of personal injury cases are high-dollar claims or complicated claims that won’t be resolved without litigation.

Examples of high-dollar injury cases include:

  • Catastrophic brain or spinal cord injuries
  • Medical malpractice
  • Serious injuries caused by defective products
  • Wrongful death

Some cases are too complicated to handle on your own, even if your injuries are less severe. For example, car accident cases with policy limits that won’t cover all injured persons, or multi-car accidents where liability is contested.

Filing a full-blown personal injury lawsuit can be expensive and complicated, and almost impossible to win without a skilled attorney on your side.

Injury Claim Denial Questions and Answers

Charles R. Gueli, Esq. is a personal injury attorney with over 20 years of legal experience. He’s admitted to the NY State Bar, and been named a Super Lawyer for the NY Metro area, an exclusive honor awarded to the top five percent of attorneys. Charles has worked extensively in the areas of auto accidents,... Read More >>