If Your Car Accident Insurance Claim Gets Denied

A look at your legal options if the insurer rejects your claim.

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You were in a car accident, and it wasn’t your fault. You did all the things you were supposed to do after a car accident: you took pictures of the accident scene, got the names of witnesses, reported the accident, got medical treatment, didn’t miss any of your doctor’s visits, and made a claim against the other driver’s insurance company. But the insurance company has denied your claim. Now what? What happens next depends on whether you made the claim yourself or whether you had a lawyer make the claim.

You Made a Claim and the Insurer Denied It

If you made the claim yourself and the insurer denied the claim, you need to think about retaining a lawyer. There is nothing further that you can say to the adjuster. Most likely, the insurer denied your claim for one of two major reasons: 1) the adjuster truly believes that your claim has no merit, or 2) the insurer simply denied your claim in the hopes that you will give up.

If the adjuster believes that your claim has no merit, then no amount of talking to him/her is going to change the situation; the only thing that a lawyer can do is take your case out of the insurance pipeline and file a car accident lawsuit.

But sometimes adjusters will deny claims even though they know that the claim does have some merit. It should not be surprising to know that an insurer might sometimes deny a claim simply as a financial move. An insurance company is in business to make money for its stockholders, not for the benefit of people who file claims against it. An insurer looks at each claim from a profit and loss and risk perspective. If an insurer believes that denying a claim is the best financial move for it at that time, it will deny the claim. Insurers know that there is a certain percentage of people with otherwise valid claims who will not pursue the claim (i.e., hire a lawyer) if the claim is denied.

Either way, the reason that the insurer denied your claim is not significant to you. But if the insurer denied your claim just to push you around, it is possible that it will look more seriously at your claim if you are now represented by a lawyer.

The Insurer Denied Your Attorney’s Claim

If you have a lawyer who put together a demand letter and sent it off to the insurer, and the insurer denied your lawyer’s claim, now your only choice is to give up or file a lawsuit.

You might think, “How dare they deny my claim! We should file a lawsuit immediately.” But you should be aware that insurance companies treat claims from lawyers with far more respect than they treat claims from unrepresented persons. They will not flatly deny claims from qualified lawyers for no good reason. They usually will make some offer, however low.

So, when lawyers have a claim summarily denied, they are going to think very hard about whether they have missed something. They will ask the adjuster why the claim was denied. They will try to prod the adjuster to disclose the evidence that the adjuster used to deny the claim. Unfortunately, adjusters rarely disclose the evidence against the plaintiff before the lawsuit, just like plaintiff’s lawyers rarely disclose their evidence before they have to.

If the insurer denies your lawyer’s claim, you can expect that your lawyer is going to ask you to come into the office and sit down for a brutally honest talk. Most lawyers are willing to file suit on tough cases, but they don’t want to waste their time with a suit that has no chance of succeeding. They will want to review all of the evidence with you so that you can understand the odds against you.

If your lawyer is prepared to go forward with your case, he/she will usually send the insurer notice that he/she intends to file a claim under your state’s Consumer Protection Act or Unfair Settlement Practices Act, if your state has such an act. That will give you additional leverage later on in the case, if it is determined that the insurer in fact denied your claim for no good reason.

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