Can an Insurance Company Deny a Personal Injury Claim?

Content Legally Reviewed By Matt Conner

Yes, an insurance company (whether your own or the other party’s insurance company) has the right to deny an insurance claim. However, they cannot dismiss claims simply because they don’t want to pay. Instead, they must have legal, justifiable reasons for doing so. When insurers unfairly deny claims or purposely delay a decision on a claim, they may be violating state and federal laws.

To determine if your claim was denied justly or not, you should consult with an injury attorney. An attorney will review your case, help file your claim with the insurance company, and is already prepared for the common denial reasons. They are also ready to take your case to court and fight back against insurance companies refusing to pay on legitimate claims.

Bad Faith Insurance Practices – and Your Rights

When you have a denied injury claim, you need to first determine if the insurer is operating in bad faith or if they have a legal reason for denying that claim. Bad faith practices are dangerous for insurance companies. Not only will they be taken to court for the injury claim, but they may be charged with additional damages for their bad faith practices. Furthermore, they may face fines from the state where they sell insurance policies.

Insurance policies are paid for as a guarantee that you will have coverage. Whether filing a claim with your insurance or other parties, the purpose of your monthly premiums is that you are guaranteed to receive compensation – even if you were at fault for the accident. The insurance company has an obligation to investigate, negotiate, and settle all insurance claims fairly.

When insurance companies are working for a third party, they still have that same obligation to operate in good faith. That said, they also work for the other party, and they do their best to limit how much they pay out on an insurance claim. Furthermore, insurance companies are still businesses. Like all businesses, they want to protect their bottom line – which means paying as little as possible on claims even if they are legitimate.

When a Denial Is Not Bad Faith

You might think the insurance company is dealing in bad faith because they denied your claim, but a denial itself is not a breach of the good faith requirement.

When you and the claim’s adjuster do not agree on how to proceed with a claim, or you feel that you are not receiving a fair settlement, that is not always bad faith. The insurance company may have evidence that lessens their client’s responsibility, and as stated prior, they will do whatever it takes to reduce how much they pay out on these types of claims.

When a Denial Is in Bad Faith

Other times, there are denials that are bad faith. For example:

• Denying a claim before completing an investigation. If the insurance company rejects the claim for reasons but does not even investigate the claim, then they may be acting in bad faith. Insurance companies are required to investigate a claim thoroughly before they deny it.
• Offering a much lower settlement than legally justified. Sometimes, insurance companies will not deny a claim but offer a settlement much lower than legally justified in order to frustrate and push a victim into settling for less.
• Claiming a change in policy that is not present in the policy documentation. Some insurance companies will claim phantom policies as a reason for denying a claim – even when those policies are not in the insurance documents.

What If a Denial Is Not a Bad Faith Issue?

There are numerous reasons why your personal injury claim could be denied. And the majority of the time, the insurance company is not acting in bad faith.

For example, you may not have filed the claim properly or within the specified time limit. Waiting too long to file an injury claim with an insurance company can make your claim ineligible for compensation. That is why you should always file right away. When submitting, you need to take precautions to fill out the claim correctly. Any errors or missing documentation will result in a denial. Then, you will have to start the process over – which only delays the process further.

Some reasons claims are denied that are still in good faith include:

• Policy Exclusions – The insured’s policy does not cover the type of accident you encountered. Therefore, they are not legally required to pay out on the claim.
• The Policy Lapsed – At the time of the accident, the insured’s coverage lapsed or was no longer active, which means the insurance company does not have to pay on that claim.
• You Did Not Supply Evidence – You must supply information about what caused the accident and show that the insured was at fault for that accident.
• The Location Is Outside the Coverage Area – Some policies limit how far they cover. For example, you might have been injured in another country.
• The Accident Was Not the Cause of Your Injuries – If the accident was not the direct cause of your injuries, the insurance company is not required to pay on that claim.
• The At-Fault Party Is Not on the Policy- A driver who caused the accident was not eligible for coverage under the vehicle owner’s policy.

Denial of insurance claims can be devastating, but that doesn’t mean you are without options. In most cases, you can reverse the decision just by bringing in legal assistance.

How an Injury Advocate Can Help

An injury attorney will review the denial letter, which usually explains why the claim was denied. Sometimes, it is as simple as submitting more evidence. Other times, the insurance company may have unfairly denied your claim. With an attorney, you have someone experienced in injury law and deals with insurance companies daily. Therefore, you are more likely to get a positive outcome from your denial than if you attempted to resolve it on your own.

If you have been unfairly denied for your insurance claim after an accident, contact the attorneys at Brett McCandlis Brown & Conner, PLLC. We are here to advocate for your right to fair compensation. Schedule your free consultation at 206-429-8772, or request more information online.

About the Author

Matt Conner

Matt Conner has a proven track record of success. Following his graduation from Willamette University with a double major in mathematics and economics, Matt worked as an economist for the Office of Economic Analysis for the State of Oregon before moving onto working in mortgage banking and real estate. Although Matt would move on to law school shortly thereafter, his experience in the financial sector has provided him with valuable experience in how to achieve maximum compensation for his clients.

Learn More About Matt