What Should I Do If My Car Accident Claim Was Denied?
Ask for a letter of explanation from your insurance company or request a dispute—otherwise, you won’t receive a payout after a denied claim.
Written by Olivia Rose
Reviewed by Kathleen Flear
If your car accident claim is denied, ask the company for a written explanation to see if the reason is legitimate—and request a dispute if you disagree.
- A denied claim means that you may not receive a payout (or only a partial payout).
- Ask the company for a letter to find out if there is a legitimate reason your claim is being denied.
- Not enough coverage, driving under the influence, or inaccurate claims are common reasons for denial.
- If you think it’s a bad faith denial, you can request a dispute or hire an attorney.
- A denied claim means that you may not receive a payout (or only a partial payout).
- Ask the company for a letter to find out if there is a legitimate reason your claim is being denied.
- Not enough coverage, driving under the influence, or inaccurate claims are common reasons for denial.
- If you think it’s a bad faith denial, you can request a dispute or hire an attorney.
What does it mean to have an insurance claim denied?
An insurance claim denial means that your insurance provider has found reason to refuse your request for coverage. It means they will not pay out for any repairs or injuries.
Example: You get into a minor fender bender that ruins your front bumper and headlights.
- A mechanic estimates your repair cost to be $3,000.
- Your insurance provider responds with a denial of your claim.
Sometimes, your insurance provider will be fully within their legal rights when denying your claims — but there are times when you can fight for a claim approval to receive all the money you are owed under your driver’s insurance policy.
Why would my insurance company deny my claim?
Insurance claims adjusters are responsible for approving or denying claims. This process involves looking at the details of your claim and verifying if your provider actually does owe the policyholder money in this particular situation.
Adjusters are trained to look out for insurance fraud—or false claims people make to scam their insurance providers out of money. However, there are other reasons that your claim could be denied.
Here are some of the most common reasons for a claim being denied:
You hit your policy limit
Let’s say you get into an auto accident (for which you were the at-fault driver) 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 since that coverage was never purchased in the first place.
What happens: If you hit your policy limit, you will not receive the full amount requested on your claim.
You purchased insufficient coverage
If you file a claim for $5,000 in medical bills but your car insurance policy only includes
collision coverage
, your claim will be denied. As a reminder, there are several main types of car insurance coverage:
What happens: If you try to claim insurance coverage that is not in your policy, you will be denied.
You filed an improper application
Accurate reporting in your claim is integral to having your claim approved. An insurance company can deny your claim if anything is misreported—even if the mistakes were unintentional.
Your claim can also be denied if you are found to have been dishonest about any information when you originally purchased your insurance policy.
What happens: If you make any mistake in reporting the incident, your claim might be denied.
You broke state law
An insurance company can deny your claim if you were found to be partaking in illegal activity at the time of your accident—for instance, being under the influence. This applies even if you were not the at-fault party in the accident, such as being under the influence when another vehicle hit you.
What happens: If you were driving under the influence, you forfeit your right to compensation.
You didn’t file the report promptly
Your provider can deny your claim if you unnecessarily delayed filing it. A
delayed claim
is also a red flag for insurance fraud.Reading the fine print of your insurance policy will help you decide the right policy to purchase—before you face the unfortunate situation of having to make claims to your provider.
What happens: If you wait too long to file a claim, you may be denied coverage simply because of the delay.
Key Takeaway Claims can be legitimately denied if you hit your coverage limits, fail to file promptly, or break the law, among other reasons.
What to do if my insurance claims are denied
Your situation is not hopeless if your auto insurance claim is denied. You might still be able to get the payout you are owed by your insurance provider.
Here are your options if your claim is denied:
Ask for an explanation: Ask that your company provide a denial letter outlining why your claim was denied. This first step is important so that you have written verification of your insurer’s understanding of your situation. It will also help you assess whether your provider is in the right or the wrong denying your claim.
Request a dispute: Requesting a dispute with your provider is the formal method of challenging your provider’s decision to deny your claim. In the appeals process, the claimant will need to provide all the verification possible on why the provider owes money according to the policy purchased.
Hire an independent claims adjuster: Independent claims adjusters are third-party insurance adjusters that may help your case by verifying all the information about your vehicle and the damages.
Contact the Department of Insurance: This will send your case into the stage of arbitration, in which a third party will consider both sides of the case (you vs. your insurance provider) and come to a legally binding decision on whether your claim should be upheld or denied.
Hire an attorney: This step achieves the same result as contacting the Department of Insurance—but car accident lawyers can be more efficient and timely (and less work for you) than the Department of Insurance. After the free consultation, a law firm will cost you money and may not be worth it unless your provider legally owes you a significant amount in claim payouts.
Key Takeaway If your claim is denied, you can file a formal dispute or hire a third-party adjuster to assess the situation.
How to prevent having a car accident claim denied
Simpler than contesting a claim denial is doing all you can in the first place to prevent your claim from being denied.
Here’s what you can do to prevent having your insurance claims denied:
Report everything immediately
Timeliness is key for making insurance claims.
The longer you wait,
the more likely you are to have your claim denied.Report everything accurately
Insurance claims adjusters are trained to be on the lookout for insurance fraud. Anything that you report inaccurately about an accident will be a huge red flag to a claims adjuster.
Make sure that you’re always being proactive and honest in reporting the following:
- Status of the vehicle, including mileage and significant improvements that have been made
- Your demographics and circumstances at the time of the incident
- Accident details, like time of the accident
An insurance provider can have a legitimate claim denial if you report any incorrect information—even if this misinformation was unintentional on your part. You should always double- and triple-check all the information you give to your provider before you formally submit your insurance claim.
File a police report
If the damage to your vehicle is due to vandalism or other criminal activity, you should file a police report. Failure to file a police report for something like vandalism can be a sign of insurance fraud.
Get estimates for repairs (and have them documented)
Estimates from a
professional mechanic
help you know the precise amount you need to make a claim for. It also verifies the amount of your claim for your insurance provider.Seek medical attention immediately
It can take days or weeks for you to feel the physical effects of an accident. It’s always a good idea to seek medical treatment as soon as possible after an accident to verify any potential injuries with medical records.
If you wait too long before seeking care and filing a
bodily injury
claim, your insurance provider may suspect insurance fraud and deny your claim. Being proactive and seeking medical attention from the get-go can protect you from having your eventual claim denied.Read the fine print of your insurance policy
Your provider will have a legitimate claim denial if the claim you make isn’t covered in your policy to begin with. Read through the details of your insurance policy to know what you can reasonably (and legally) expect from your insurance provider when you make a claim.
Key Takeaway To avoid a claim denial, understand your coverage and be sure to report everything accurately and in a timely manner.
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FAQs
What do I do if my car insurance claim is denied?
First, read through your policy to verify your coverage and deductibles. Request a letter from your provider outlining why your claim was denied. Then, you may request a dispute with your company.
If this is unsuccessful, you can contact an independent claims adjuster, hire a car accident attorney for legal advice, or contact the Department of Insurance to see that your provider pays out what you’re owed.
Will insurance go up if my claim is denied?
Yes, potentially. If the accident you reported leaves a negative mark on your driving record, your insurance rates may go up.
Jerry
can help you find the cheapest car insurance policies if you’re facing an increase in your premium.
Is it bad if my insurance claim is denied?
It depends on your situation. A claim for medical bills being denied could mean huge expenses that you cannot afford and must cover out of pocket. You may also be looking at higher insurance rates if the accident you reported left a negative mark on your driving record.
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