Why Do Insurance Companies Deny Claims?
The primary reason insurance companies deny claims is to save money. They are for-profit companies, meaning they are in business to make money. Therefore, paying insurance claims reduces their profits.
However, the insurance company will not tell you they are trying to make more money when they deny your claim. Instead, the company will provide a seemingly legitimate reason for denying the claim.
As experienced Los Angeles personal injury lawyers, we understand why insurance companies deny claims. We also know how to fight back to get you the money you deserve. Let’s look at some common reasons why insurers often deny claims.
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Disputes Regarding Causation and Fault
When you file car insurance or other personal injury claims, you have the burden of proving causation and fault. You must prove that the other party caused your injuries to hold them liable for damages.
Typically, that requires you to prove the elements of negligence, an intentional tort, or strict liability. The insurance company may argue that your evidence doesn’t prove that their insured caused the accident that resulted in your injuries. Therefore, the insured is not at fault and cannot be liable for your damages.
Your legal team will thoroughly investigate your case to gather evidence proving that the other party is at fault. They might consult one or more experts to obtain additional evidence to support the claim.
Disputes Related To the Severity of Your Injuries
An insurance company might say you are exaggerating your injury to increase the value of your claim. Therefore, the company may deny the claim and refuse to pay.
Prompt medical attention after an accident or other injury is essential to build your case for damages. Delays in medical care give the insurance company a reason to claim the accident did not cause your injuries.
Depending on the injuries and circumstances, you might need to see a specialist or medical expert. Experts provide opinions and documentation that can be more difficult to refute.
Failure To Mitigate Damages
Injured parties have a legal obligation to mitigate damages. That means you must take reasonable steps to limit your losses.
Suppose your doctor prescribes physical therapy for a back injury. However, you attend just a few sessions and do not follow the therapist’s treatment plan. Because you did not follow the treatment plan, your condition worsens, and you must have surgery to correct the problem.
The insurance company might deny any damages arising from your failure to follow a treatment plan. In other words, the company could refuse to pay for the surgery because you would not have needed it had you participated in physical therapy.
Do not be bullied by this tactic. Talk with a lawyer about your case. The insurance company must prove its allegations to deny your claim legitimately.
Bad Faith Insurance Practices
Insurance policies are contracts. When a policyholder purchases insurance coverage and complies with the terms of the contract, the company has a legal duty to investigate and process claims filed by the policyholder or a third party. Failing to investigate and pay valid claims can be considered bad faith.
Examples of bad faith insurance practices include, but are not limited to:
- Refusing to investigate a claim
- Offering an amount that is far less than the claim is worth
- Threatening or pressuring a person to accept a settlement offer
- Refusing to pay a valid insurance claim
- Delaying decisions without just cause
- Requiring a person to submit documents and complete forms that are unnecessary and burdensome
- Misrepresenting the policy terms or the law
- Undervaluing claims below the deductible amount
The policyholder might have a bad faith claim against the insurance company if the company’s bad faith caused the policyholder to incur unnecessary damages and losses. If an insurance company ignores you after you file a claim or takes any of the above actions, talk with a lawyer about your legal options.
Expired Statute of Limitations
The company might claim that the deadline to file a claim has expired. The statute of limitations for most personal injury claims in California is two years from the injury date. However, there are exceptions.
It is always best to meet with a Los Angeles personal injury attorney as soon as possible after an injury or accident. An attorney can calculate the deadline for filing claims based on the statute governing the type of personal injury claim.
The Policy Excludes the Reason for the Claim
Insurance policies often have exclusions and exceptions to coverage. For example, most car insurance policies do not cover accidents if the driver was using the vehicle to transport a paid fare at the time of the accident. Policies also contain exclusions for the damages the policy covers and the types of incidents covered.
If the insurance company claims the policy does not cover your claim, ask for a written explanation of the exclusion. Also, request a copy of the insurance policy to compare to the written explanation.
The Insurance Policy Lapsed
A company might deny a claim because of a lapsed policy. The insured did not pay the insurance premiums, so the company canceled the insurance coverage.
Unfortunately, many people drive without insurance. You might receive compensation from your insurance provider if you have uninsured motorist coverage. However, you must prove that the driver was uninsured and caused the crash.
Breaking the Law
Some insurance policies contain a clause that denies coverage if the insured was breaking the law at the time of the accident. This reason is rarely used, but it does happen. Talk with a lawyer as soon as possible to determine if the company has grounds for denying the claim based on this reason.
Insufficient Insurance Coverage
An insurance provider might deny a claim because it exceeds the value of the insurance coverage. The company might agree to pay the policy limits to the injured victim but deny the remaining balance based on insufficient coverage.
What Should You Do If an Insurance Company Denies Your Claim?
The above list of reasons why insurance companies deny claims is not complete. There are many reasons a company might deny a claim.
The critical takeaway is that you do not have to accept a denied insurance claim. You can fight the denial.
Take immediate action if you receive a notice of a denied claim. Your time to file a claim could be running out. The best way to fight a denial is with the help of an experienced accident attorney.
Schedule a Free Consultation With Our Los Angeles Personal Injury Lawyers If an Insurance Company Denied Your Claim
You do not have to fight the insurance company alone. Our attorneys at M&Y Personal Injury Lawyers will put our considerable resources and skills to work for you. Contact or call our law firm to schedule your free consultation with an experienced Los Angeles personal injury attorney to discuss your case at 866-864-5477.