What to Do if Your Car Insurance Claim is Denied

March 20, 2025

Filing a car insurance claim after an accident can be stressful enough without having to deal with the added frustration of a denied claim. Whether it’s due to a coverage dispute, paperwork issues, or a misunderstanding of policy terms, a denied claim can leave you feeling helpless when you’re already facing financial strain from medical bills or vehicle repairs.

If your car insurance claim has been denied, it’s important not to panic. There are several steps you can take to challenge the denial and ensure you receive the compensation you’re entitled to. In this blog, we’ll walk you through what to do if your car insurance claim is denied and how you can work to resolve the situation.

1. Review the Denial Letter or Email Carefully

The first step in addressing a denied car insurance claim is to thoroughly review the denial letter or email. Insurance companies are required to provide a detailed explanation of why your claim was rejected. Look for the following:

Reason for Denial: The letter should specify the exact reason your claim was denied. Common reasons for denial include missing information, lack of coverage for the incident, failure to meet policy conditions, or disputes over fault.
Policy Terms: Check if the denial relates to a specific clause or exclusion in your policy. For example, some policies don’t cover accidents that occur while driving under the influence or those that happen outside of a specified area.
Claim Number: Ensure that you have all necessary claim numbers and information for reference in future communications.

Why this matters: Understanding the exact reason for the denial is crucial before you take any further steps. Without knowing why your claim was denied, it’s difficult to address the issue or appeal the decision.

2. Double-Check Your Policy

Once you’ve reviewed the denial, it’s time to revisit your car insurance policy. Make sure you fully understand your coverage and whether the incident in question falls within the scope of your policy. Common things to look for include:

Coverage Types: Does your policy cover the type of damage or accident that occurred? For example, some policies exclude damage caused by certain circumstances, such as acts of nature or collisions with uninsured drivers.
Exclusions: Are there any exclusions in your policy that may apply to your case? For instance, your policy may not cover incidents that occur while you’re using your vehicle for business purposes or while driving under the influence.
Deductibles: Ensure you’re aware of your deductible and whether it applies to the specific claim.

Why this matters: Understanding your policy is essential for determining whether the denial was justified or if there was an error in the insurance company’s decision.

3. Contact Your Insurance Company for Clarification

If the denial doesn’t seem to align with the coverage outlined in your policy or you don’t fully understand the reasoning behind it, reach out to your insurance company. Contact the claims adjuster or customer service representative who handled your claim and ask for clarification. Be sure to:

Ask for a Detailed Explanation: Request a clear explanation of why your claim was denied, and ask for any supporting documentation or evidence they used to make the decision.
Provide Additional Information: If the denial was due to missing information or documents, submit the necessary paperwork or evidence to support your claim.
Request a Re-evaluation: If new information or clarification could change the outcome of your claim, ask if they would be willing to review your case again.

Why this matters: In some cases, denied claims result from incomplete information, misunderstandings, or errors. By communicating with your insurance company, you may be able to clear up any confusion and get the claim approved.

4. Appeal the Denial

If after reviewing your policy and discussing the matter with your insurer, you still believe the denial was unjustified, you have the right to appeal the decision. Insurance companies have formal appeals processes in place, so follow the steps provided in the denial letter or on the insurer’s website.

Here’s how to approach the appeal process:

Follow the Appeal Procedure: Ensure that you adhere to the deadlines and requirements outlined by your insurance company for submitting an appeal. Missing deadlines or failing to follow the proper procedure could result in the loss of your right to appeal.
Provide Supporting Evidence: When submitting your appeal, include any additional documentation, such as police reports, medical records, photos of the accident scene, repair bills, and other relevant evidence that could support your claim.
Stay Organized: Keep a detailed record of all communications, including emails, letters, phone calls, and any documentation you submit during the appeal process.

Why this matters: The appeals process allows you to present your case in greater detail and provide new evidence that may lead to a different decision.

5. Consider Hiring an Attorney

If your claim continues to be denied despite your best efforts to resolve the issue, it may be time to seek legal assistance. An experienced car insurance attorney can help you understand your rights, review your case, and guide you through the process of appealing the denial.

A lawyer can help with the following:

Negotiating with the Insurance Company: Attorneys can negotiate on your behalf to ensure that the insurance company is following proper procedures and fulfilling their obligations under the law.
Filing a Lawsuit: If necessary, an attorney can help you file a lawsuit against your insurance company to recover damages. Insurance companies are required to act in good faith, and failing to pay a valid claim could be grounds for legal action.

Why this matters: Insurance companies may deny claims hoping that policyholders will accept the decision or give up. An attorney can help ensure that you are treated fairly and help you pursue the compensation you deserve.

6. File a Complaint with Your State’s Insurance Department

If you feel that your insurance company has treated you unfairly or has acted in bad faith, you can file a complaint with your state’s Department of Insurance. Each state has a regulatory body that oversees insurance practices and ensures companies adhere to the law.

File a Complaint: Provide all relevant documentation, including your policy, the denial letter, and any communications you’ve had with your insurer. The state department can investigate the issue and determine whether your insurer’s actions were lawful.
Seek Resolution: The state department may help mediate between you and the insurance company or take regulatory action if the company is found to be in violation of insurance laws.

Why this matters: State insurance departments help ensure that consumers are treated fairly and can provide additional support if you believe your insurer is acting unlawfully.

Conclusion

Having a car insurance claim denied can be frustrating, but it’s important to remember that you have options. By carefully reviewing the denial, understanding your policy, and appealing the decision, you can increase your chances of getting the compensation you deserve. If all else fails, seeking the assistance of an attorney or filing a complaint with your state’s insurance department can provide additional avenues for resolution.

Don’t let a denied claim discourage you—there are steps you can take to ensure that your rights are protected and that you receive the coverage you’re entitled to under your policy.