claim is denied, you may decide to file a lawsuit against your car insurance company. But first, consider why your claim was denied to be sure you have a case against your insurer.

Steps to take if your car accident claim is denied

If your car accident claim was denied, don’t give up hope! You still have several options available to you following a denied claim. Here’s what you can do.

Ask for an explanation

Before you do anything else, ask your insurer for an explanation of the denial. To do this, contact your insurance provider and ask for a denial letter outlining why your claim was not accepted. This will show you your insurance company’s understanding of the situation, which should help you understand whether there was a legitimate reason for the denial.

Request a dispute

If you believe that your claim was denied for illegitimate reasons, you can request a dispute. This is the formal method of challenging your provider’s decision to deny your claim.

To get this process started, you’ll need to write an appeal letter to your provider explaining why they should accept your claim. This letter should include any evidence to support your claim, including photographs, police reports, medical records, and other relevant documents.

In the appeals process you, the claimant, will need to provide as much information as possible proving that the provider owes money according to the policy you purchased.

Hire an independent claims adjuster if you feel that the payout was unfair

When you make an insurance claim, your car insurance company will send their own insurance adjuster to determine whether or not your claim is legitimate and your resulting compensation. However, you can choose to hire an adjuster on your own.

Independent claims adjusters are third-party insurance adjusters who may help your case by verifying all the information about your vehicle and the damages. It may be helpful to hire an independent adjuster if:

Your claim includes several expensive damages

You’re worried that your insurance provider may have underestimated your claim and your payout wasn’t complete or fair

You feel that the adjuster sent by your provider didn’t perform a complete assessment of the damages

While hiring an independent claims adjuster can be a big help when disputing your claim, you’ll need to pay for this service, usually via a percentage of your final settlement.

Contact the Department of Insurance

To have your case decided by a third party, contact your state’s Department of Insurance (DOI)1. This will send your case into arbitration, in which a third party will investigate your case, consider both sides (yours and your insurance provider’s), and come to a legally binding decision on whether your claim should be upheld or denied.

Contacting the DOI is not the same as filing a lawsuit against your insurance provider. When you file a complaint with your state’s DOI, you’re letting the government know that your provider is acting in bad faith or in violation of insurance law. When you file a complaint with the DOI, you’ll be asked to provide documentation of all your communications with your provider as well as supporting evidence about your accident claim.

There are several things that the DOI cannot help you with. These include:

Acting as your lawyer or legal defense

Making medical judgements

Determine fault

Determine the value of damaged or stolen property

If your dispute with your insurance provider includes any of these elements, you’ll need to hire a claims adjuster and/or a car accident lawyer.

Alternatively, hire a car accident lawyer or personal injury lawyer

Like contacting the Department of Insurance, hiring a car accident attorney or personal injury attorney will put you in the position to argue your case. However, unlike filing a complaint with the DOI, hiring an attorney will typically send your case to small claims court.

Car accident lawyers are often more efficient than the Department of Insurance and may require less work on your part. Just keep in mind that after the free consultation, a law firm will cost you money. This service may not be worth it unless your provider legally owes you a significant amount in claim payouts.

Keep in mind that the statute of limitations for a car accident is usually between two and three years, but laws vary by state2. If you choose to take legal action, find an experienced attorney and gather supporting evidence as quickly as possible. This evidence might include photos of the scene of the accident, photos of the damages, eyewitness accounts, and your medical records (for proof of medical treatment and other medical expenses).

Why did your auto insurance company deny your claim?

Before you hire a car accident lawyer, you should consider why your provider denied your car accident claim in the first place. Here are a few common scenarios:

You hit your policy limit

If you make a claim that goes beyond the coverage limits listed on your car insurance policy, your insurance company will not be obligated to pay more than is listed on your policy agreement.

For example: Let’s say you get into an auto accident and incur $40,000 in medical bills—but the insurance policy you purchased only covers up to $30,000 in bodily injury expenses after your $1,000 deductible. In this case, your provider would deny the last $9,000 of your claim.

If you hit your policy limit, you will not receive the full amount requested on your claim. However, you will usually still receive a payout up to your coverage limit.

You purchased insufficient coverage

If you file a claim for a type of car insurance you don’t have, your claim will be denied. As a reminder, there are several main types of car insurance coverage:

Personal injury protection (PIP)

Bodily injury liability

Property damage liability

Collision coverage

Comprehensive coverage

Underinsured/uninsured motorist coverage

So, for example, say you get into an accident in which your car is damaged, but you don’t carry collision insurance. In this case, any car insurance claims related to repairing your vehicle would be denied, since you don’t carry the right type of insurance.

There were errors in your application

One of the most important factors when trying to get your claim approved is giving a clear, accurate report of the situation. If you misreport anything—even unintentionally—your claim may be denied. This is a common reason for insurance claim denial.

If you were intentionally dishonest about anything when you originally purchased your insurance policy (like your vehicle information, for example), your insurer may deny you on those grounds as well.

You violated state law

If you were doing anything illegal that could have contributed to your accident, such as driving under the influence, your insurance provider may deny your claim. In cases of illegal activity, information about the accident found in the police report could be enough to justify an insurance claim denial.

This rule applies even if you were not the at-fault driver in the accident. To ensure a fair settlement with your provider, gather evidence that you were not breaking the law at the time of the accident.

You didn’t file quickly enough

Insurance providers consider a

delayed claim

to be a red flag that may indicate insurance fraud. If you took an unnecessarily long time filing your claim, your provider might deny it—and the timeframe for filing a claim can vary by insurer.

Reading the fine print of your insurance policy will help you learn more about the claims process and any time limits that may be placed on your filing. When possible, read through this information before purchasing an insurance policy so you know what to expect.

How does a denied car accident claim affect your car insurance rates?

The good news is, a denied car insurance claim will rarely directly affect your car insurance rates. However, being named the at-fault party in an accident will raise your premium in the future, as will reports of any illegal activity while behind the wheel.

If you’ve recently been in a car accident and see a hike in your insurance rates, it may be time to check

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and see if you can get a better rate with a new provider.

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FAQ

What is a bad faith insurance claim?

A bad faith insurance claim is a claim that you, the policyholder, make against your insurance company if you believe that they did not behave in a fair, appropriate manner while processing your claim. If, for example, you make a personal injury claim and are forced to wait for several months to receive medical treatment, you could file a bad faith insurance claim3.

What are your legal options if your insurance company denies your personal injury claim?

If you’d like to take legal action against your insurance provider, you can hire a personal injury lawyer to offer legal advice and help you take them to court. Alternatively, you can file a report with your state’s Department of Insurance. This process takes longer, but it’s cheaper than hiring an attorney.

How do you build a strong case in an insurance lawsuit?

The most important thing when building an insurance lawsuit is evidence. Things like a police report, proof of property damage (ie, photos and videos), medical records, proof of lost wages, proof of pain and suffering, and any additional evidence you can find will go a long way toward proving the validity of your insurance claim.

Meet our experts

Liz Jenson

Liz Jenson is an insurance writer who specializes in general automotive and insurance topics. Liz’s mission is to produce informative and useful content to help car owners make smart choices when buying cars and car insurance. Since joining Jerry in 2021, Liz has written nearly 4,000 long- and short-form articles on topics including state-specific insurance recommendations, common car insurance questions, and deep dives into vehicle model details.

Before they came to Jerry, Liz was a full-time student at Indiana University, Bloomington working on a double major in English and French.

Amy Bobinger

Licensed Insurance Agent — Expert Insurance Editor

Expert insurance writer and editor Amy Bobinger specializes in car repair, car maintenance, and car insurance. Amy is passionate about creating content that helps consumers navigate challenges related to car ownership and achieve financial success in areas relating to cars.

Amy has over 10 years of writing and editing experience. After several years as a freelance writer, Amy spent four years as an editing fellow at WikiHow, where she co-authored over 600 articles on topics including car maintenance and home ownership. Since joining Jerry’s editorial team in 2022, Amy has edited over 2,500 articles on car insurance, state driving laws, and car repair and maintenance.

SOURCES

https://content.naic.org/state-insurance-departments

https://www.forbes.com/advisor/legal/auto-accident/car-accident-statute-limitations/

https://www.forbes.com/advisor/legal/personal-injury/bad-faith-insurance/