Vehicle crashes normally leave you with severe injuries or a damaged vehicle. When you sustain harm or property damage, and the other party involved in the accident is to blame, you must pursue compensation for your losses. Most California personal injury claims are settled out of court by dealing with claim adjusters. However, it does not make these settlements straightforward. Matters go from bad to worse when an insurer denies your claim and rejects your request for compensation.

What are the reasons that an insurer might deny your claim for compensation? How can you lower the chances of a claim denial, and what action should you take when your claim is denied? Below are the primary reasons for car crash claim denials and the best action to obtain your compensatory damages.

Reasons an Insurer Will Reject Your Claim

The California auto insurance statute requires all drivers to have minimum insurance coverage. That way, when someone’s negligence causes an accident, the plaintiff can claim against the liable party’s insurer. Alternatively, the policyholder can turn to their insurance policy if the at-fault party is uninsured or underinsured. Unfortunately, your insurer, or the insurer of the other driver liable for your car accident and injuries, can deny your insurance claim for several reasons. Cases of rejection of insurance claims are prevalent. The common reasons an insurer will reject your claim are:

Bad Faith

California statutes require insurance firms to defend and indemnify their policyholders. It means that when the policyholder has injured a third party in a car accident, the insurer should quickly and fairly investigate the claim and fulfill their good faith duty.

An insurance policy is an agreement between the insurer and the policyholder. Every deal is a covenant of fair dealings and good faith, making it compulsory for each party to honor its obligation. Also, a party to the contract should not interfere with the other party's right to obtain compensation.

The law requires the insurance firm to do the following:

  • Compensate claims when one experiences a covered risk
  • Conduct further investigations into the accident to determine liability
  • Defend the policyholder against claims from third parties
  • Honor their good faith duty when settling claims

Sadly, an insurer can act in bad faith by:

  • Unreasonably rejecting or delaying a claim from a policyholder or third party
  • Failure to promptly and fairly investigate claims
  • Disregard reasonable standards during claim investigations
  • Refuse to communicate about a claim
  • Misrepresent facts regarding policy benefits, provisions, or coverage in the insurance agreement.
  • Unreasonably delay or fail to compensate a valid claim
  • Refuse to sufficiently explain their reasons for rejecting a claim
  • Violate a contract
  • Compromise your capacity to defend against a contract

An insurer has the right to reject your claim as a policyholder or third party, but after thorough consideration. The company should have genuine and detailed reasons for the rejection.

Unfortunately, many insurers have found ways to breach contracts. Many will decline your claim without even considering its validity. Others will delay the process, making you nervous and desperate to take any offer they make.

Failure to Bring the Claim Within the Provided Timeline

Insurers have strict timelines when it comes to reporting car accidents. As a policyholder, you must report an accident to your primary insurer within a day or two after the accident. The insurer then makes it their responsibility to inform the insurer of the other party involved in the crash. Many companies do not have exact timelines within which you should notify them of an accident, but it is best to do it on time. And when you plan on filing an injury claim against the liable party, you have two years from the accident date to bring the claim. Claiming compensation after the lapse of the timeline provided under the law will result in a denial.

You Lack Insurance Coverage

Your insurer only provides compensation if you had sufficient coverage during the accident. The insurer will keenly analyze the policyholder’s coverage to ensure it was valid before the injuries were sustained. If the policy was void, the premiums were delayed, or the policy did not exist, the claim adjuster will explain that the coverage had lapsed and reject the claim.

The Damages You Seek are Not Included in the Policy

When you file a compensation claim, you will only receive payment for damages included in your policy. Unfortunately, some policyholders exclude particular damages from their policies to make the premiums affordable. For instance, an insurer will not compensate you for an accident caused by bad weather if the policy states that you will receive damages only for injuries stemming from direct car collisions.

Disputed Fault or Liability

When presenting a claim to an insurer, you must provide your account of the crash and supporting evidence. After the insurer obtains your settlement letter, they will conduct further investigations, including interviewing witnesses, to determine its validity. If the insurer of the alleged liable party discovers that their policyholder is not to blame for the accident, they will reject your claim.

Lastly, an insurer will deny your claim if the accident was caused by a driver excluded from or not named in the policy. If any other driver was in the vehicle other than the one named in the policy, the insurer will deny your compensation claim.

Strengthening Your Auto Insurance Claim

The strength of your insurance claim depends on the quality of your demand letter. The contract between you and the insurer requires that they evaluate your letter carefully and in good faith to decide whether or not to accept your claim. The more detailed and supporting evidence you provide in the letter, the better your likelihood of obtaining compensation.

Typically, when you sustain injuries in a car crash, you submit a demand letter to the liable party or their insurer requesting compensation for the damages or losses. An experienced personal injury attorney can help you compose a compelling letter that strengthens your claim and lowers the chances of a denial.

The letter acts as an opening statement in a court lawsuit. It is addressed to the claim adjuster and explains the place and manner of the car accident, why the defendant is liable for the crash, the severity of your injuries, and the damages incurred, including future medical bills and lost earning capacity.

Because the objective is to settle the claim outside of court, a demand letter can also be referred to as a settlement letter.

  1. Reasons a Settlement Letter Should be Well Written

Your letter to the insurer will set the tone for the negotiations. It notifies the insurance adjuster of your seriousness about seeking damages upfront or through a repayment plan. The letter must contain sufficient facts to compel the adjuster to settle the matter outside court and convince them that going to court will only hurt them more than it will you.

As much as the letter sets the tone for the negotiations, the tone should not be threatening. A threatening letter could result in extortion charges when you claim that failure by the insurer to heed your demands will see you report the issue to the police. Let the letter be professional, and your attorney is the best person to draft it.

  1. Details of the Demand Letter

For you to have a solid auto insurance claim, your demand letter must contain the following details:

  • The date, place, and time of the auto collision
  • Contact information of the parties involved in the crash
  • The particular relief you are pursuing
  • Your account of the accident
  • The timeline within which the defendant must respond
  • Failure to comply will result in a court lawsuit
  • The type of injuries obtained

The demand letter should also come with supporting documents like:

  • X-rays, MRIs, and accurate test results linking the accident to your injuries
  • Pictures of the accident scene, car damage, and injuries sustained
  • Videos of the property damage and your injuries immediately after the accident
  • A copy of the police statement or report if they visited the scene to conduct investigations
  • An animation or graphic from an accident reconstruction expert explaining how the accident happened
  • Contact information and statements from eyewitnesses

The letter must also capture a summary of the damages you seek, including:

  • Medical expenses
  • Car repairs or replacement costs
  • Lost income
  • Loss of future earning potential
  • Other losses suffered from the accident if no injuries were sustained
  • Explain your general damages, such as pain and anguish, scarring, and loss of physical function. Document your feelings after the accident to demonstrate the pain you have been through. The doctor’s report and photos can also help tell your story.

You should send this letter via certified mail so that a return receipt can be your proof of delivery. If you do not send the letter officially, the insurer could deny your claim, arguing that they never received any letter. You should also send the letter via email. The name or business you address in the letter must also be accurate.

Again, ensure that you send the letter in advance when deadlines apply so that your claim is not denied because you submitted it late.

  1. Hiring an Attorney for Your Claim

The demand letter is the most crucial document your claim adjuster will receive. Its importance when obtaining compensation cannot be overstated. Therefore, you want to hire a lawyer early in the case to investigate the accident and draft the letter on your behalf to ensure it captures all the relevant details.

Today, insurers rely on claim adjusters to settle claims. These professionals inspect claims thoroughly to determine if the company should deny the claim or the amount the company should pay if the claim is valid. These individuals will interview you and witnesses, investigate the accident, and confirm if the documents provided in the settlement letter are factual. They will act like they care about your claim and want you to receive compensation. However, they only protect the insurance company's interests, denying compensation or offering the most minor compensation to increase their profit margins. Therefore, you need an attorney by your side for the claim.

Adjusters will give your claim the attention it deserves when you lawyer-up. Many experienced injury attorneys work on a contingency basis. They only receive payment when they win the case, and you receive compensation for your losses. Therefore, the fact that your attorney has taken up your case shows that they have strong faith that the facts are solid, the case is substantial, and it can be won in the trial. Therefore, when adjusters notice you have legal representation, they will know you have a strong claim and will take it seriously. The chances of denying it are minimal compared to when you lack legal representation.

The insurer you seek compensation from will question you and other parties about the crash through their lawyers. They will want to know the events leading to the claim and the damages you seek. Considering you are in shock or still recovering from your injuries, you could contradict the information on the demand letter or share the wrong details. The insurer will use inaccurate details or contradicting information to reduce your compensation or deny the claim entirely. Therefore, you need an attorney to guide you during these interviews and ensure the information you provide accurately reflects what is in the demand letter.

In some instances, the insurer can offer the most minor compensation or deny your claim. Without legal representation, you are likely to accept the verdict of the adjuster, even if it is unfair. However, with the help of an attorney, the chances of your claim being denied are minimal. They will fight aggressively to ensure you receive compensation sufficient to cover your losses.

The Role of an Attorney in a Claim Settlement

A competent attorney is critical to your auto insurance claim. First, they will collect information from you, the plaintiff,, and other sources. The attorney will then represent you in the settlement negotiation with the insurance adjuster, so they must understand all the case details.

Similarly, they must have a rough amount of the total sum you seek as compensation. An experienced car accident injury attorney will use knowledge from previous cases to develop a reasonable amount you should pursue as compensation for your damages.

Besides, the attorney will prepare all the necessary documents, including the demand letter. This increases the chances of a claim settlement and allows you to focus on recovery.

Finally, the attorney will negotiate the case for you to ensure a fair settlement, particularly when the adjuster plans on denying your claim. Even if the claim is denied, the attorney will proceed to court to file a lawsuit to represent you.

Your Options After Auto Insurance Claim Denial

Just because the insurance company or adjuster feels that your claim is not worth compensation does not mean your pursuit for compensation ends here. You can explore other avenues to obtain compensation.

Appealing the Insurer’s Decision

One of the options you can explore after the insurance company has denied your claim is to appeal the decision and have the initial decision by the company reversed to receive benefits.

Many insurers prefer to handle appeals internally. Therefore, one way to appeal is to file an internal appeal with the relevant insurance firm department. After evaluating your claim, the department can request an appeal.

Alternatively, you can settle the matter through arbitration or a private trial. In these, you and the insurer appear before an arbitrator and make your arguments, present evidence, and call witnesses. The arbitrator then considers the facts and evidence presented by the opposing sides and makes a final and binding decision. 

If you plan on appealing the court’s decision, allow your attorney to help you present compelling arguments that will lead to a favorable decision.

File a Personal Injury Suit in Court

When the insurer denies your claim, you can take the case to court by filing a suit. You have a right to sue any party involved in the car accident that is liable or at-fault for your injuries and property damage. The third parties you can sue for your losses include:

  • Pedestrians
  • Motorcyclists
  • Authorities in charge of road construction and maintenance
  • Car manufacturer

Personal injury lawsuits are based on negligence. You must demonstrate with a preponderance of evidence that the defendant owed you a duty of care, and they violated this duty. The breach of duty was the direct cause of injuries, and you suffered damages from the breach.

Also, you can sue the insurer in court for bad faith if you believe it denied you the claim in bad faith. If you can show the company delayed your claim, rejected it without a valid explanation, or did not thoroughly investigate the crash, the court will award you the damages you were seeking in the claim. You will also receive additional compensation on top of what you were demanding. Besides, the company will be penalized for its unlawful conduct.

Find an Experienced Vehicle Accident Injury Attorney Near Me

Have you been denied an insurance claim after a vehicle accident? At the Los Angeles Personal Injury Attorney, we understand the financial stress a denied claim causes, considering the loss you suffered from the accident. Therefore, we will review the reasons for the refusal, appeal the decision, or proceed to court by filing a lawsuit. Call us today at 424-231-2013 for a free evaluation of your case.