You're absolutely certain that it was your turn to go after complying with the stop sign at a four-way intersection, but another motorist saw things differently. This resulted in your vintage VW Beetle getting t-boned by the other driver's pickup truck. Thankfully you only suffered a bruised knee (although you were quite shaken), but your car was totaled. You snapped a few pictures, took detailed notes, and called the other driver's insurance company to make a claim.
Reasons an Insurer Might Deny Your Claim: Overview
There are plenty of reasons why the at-fault party's insurer may have denied your claim, even if their version of the incident appears to be factually incorrect. Usually, the reasons fall into one of two main categories: Either the insurer's claims adjuster believes your claim lacks merit, or the insurer simply hopes you won't pursue the claim further. The adjuster also may be relying on an eyewitness or is choosing to believe its client's version of what happened in the absence of an official police report.
Other possible reasons for a claim denial by the other party's insurance company include the following:
What to Do After the Other Party's Insurance Denies Your Claim
If your claim is denied, regardless of how valid you believe it is, you'll most likely need to hire an attorney if you choose to fight the denial. After all, insurers make a profit by taking in more money in premiums than they pay out in claims. An attorney's claim, however, will usually carry more weight and may be taken more seriously by the insurer.
The Demand Letter
Your attorney might first draft a demand letter, which is a more formal claim for compensation that details your side of the story, the dollar amount of the vehicle damage and/or bodily injuries sustained in the accident, and why the other driver was at fault. The insurance company most likely will feel compelled to provide a specific reason why the claim was denied, or will reverse its decision outright. It also may offer just a portion of the damages demanded.
And if you (or your lawyer) suspect that the insurer engaged in any improper claims practice prohibited by state law, an additional claim on those grounds may get their attention in a claim letter. For instance, Illinois statute (215 ILCS 5/154.6) lists numerous acts prohibited as improper claims practice, including the refusal to pay claims without conducting a reasonable investigation based on all available information.
Formal Appeals Processes
If the insurance company has a formal appeals process -- and many of them do -- then your attorney may have a better opportunity to negotiate a settlement, as opposed to a one-sided demand for damages. This may include the use of arbitration to resolve the matter. Some states, including New Jersey, require insurers to provide a formal appeals process for denied claims.
When Does it Make Sense to File a Lawsuit?
If the insurer denies your attorney's claim, you may consider filing a lawsuit against the insurance company. But keep in mind, your attorney will not want to put much effort into a claim that either has little chance of succeeding or where they suspect you haven't given them the whole story (or are lying outright). In some cases, the cost of a lawsuit may outweigh the amount of damages, which means even a victory in court could end up costing more than doing nothing.
Get a Free Evaluation of Your Insurance Claim
Car accidents are never pleasant, whether they result in catastrophic injury or just a scratched bumper. But if the other party's insurance denies your claim, even though you were not at fault, things can go from bad to worse. If you need help deciding what to do, consider having an insurance lawyer review your claim at no cost to you.
Contact a qualified auto accident attorney to make sure your rights are protected.