What Happens When My Auto Insurance Won’t Pay My Claim?
As a driver in Arizona, it is more likely a matter of when you will get into a car accident than if. Unfortunately, it can be difficult to negotiate with a car insurance company after a collision, as they tend to put their profits over helping crash victims. Withholding benefits and wrongfully rejecting claims are issues that you may encounter. Take the following steps if your auto insurance won’t pay your claim.
Review the Reason for the Rejection
Arizona is a fault-based car insurance state. This means if the car accident is the other driver’s fault, his or her car insurance will pay for your losses. If you caused the accident, your own auto insurance may provide coverage. Either way, you could face the issue of the auto insurance company rejecting your claim. If you get a rejection letter, the insurance company is obligated to give you an explanation. If there is no explanation, ask for one. Some of the most common reasons for claim denials are:
- Lapsed policy
- Inadequate coverage
- Maximum policy limit met
- Liability dispute
- Policyholder fault
- A broken law
- Failure to report the accident to the police
- Missed deadline
It may be possible to remedy the problem by submitting further evidence that shows that you were not at fault for the accident, such as signed eyewitness statements or a police report. Make sure you understand your policy and what benefits it entitles you to receive before responding to the rejection letter. If the company still does not change its decision, move to the next step.
Ask for an Internal Review
It is within your right to ask for an internal review – also known as an appeal – of your car accident claim. An internal review means that someone other than the insurance claims adjuster assigned to your case will review the claim and potentially change the company’s response. If the language of your policy was misinterpreted by the first adjuster, for example, an internal review may change the outcome. Draft an appeal letter explaining why you do not agree with the insurance company’s decision and submit it, along with any necessary documentation or evidence supporting your argument.
Request an External Review
If an internal review by the insurance company does not result in a favorable answer, contact the Arizona Department of Insurance to file a complaint. If you believe that the insurance company is guilty of rejecting your claim without a valid reason, the Department of Insurance can investigate and require the insurance company to change its decision. The insurer may also face penalties for mishandling your claim.
File a Lawsuit
A denied car insurance claim after an accident can interfere with your ability to pay your bills, get the medical care that you need without financial stress, and move forward. It may be necessary to seek professional help from a Phoenix insurance bad faith lawyer if a car insurance company has rejected your claim. A lawyer can help you file a lawsuit against the insurance company for handling your claim in bad faith.
If your car accident claim is worth less than $10,000, you may not need an attorney to go to the small claims court. You can request a resolution from the court and partake in the mediation process, where a neutral third party can help you and the insurance company resolve the issue. With a more valuable car accident claim, however, it is wise to hire a lawyer who can represent you during a trial.
A successful lawsuit against the at-fault driver or his or her insurance company could result in compensation not only for your original car accident losses, but an additional amount to penalize the insurer, as well. You also have the power to file a lawsuit against your own insurer for refusing to pay a valid claim, depending on the circumstances. An attorney can help you with the steps that it takes to file a lawsuit in Arizona.