An auto insurance company can deny auto insurance settlements. Denial is not the end if you need your vehicle’s accident losses to be covered. Vehicle insurance is something that we always hope to never need.
But in case of an unexpected accident, you will need to turn to your insurance company for assistance. However, the truth is your auto insurance company can deny your claim meaning you won’t be able to access your auto insurance settlements or personal injury settlements.
But first, let’s have a look at…
Why Do Auto Insurance Companies Deny Claims?
Auto insurance companies often deny claims when they have a legal or contractual right to do so. This simply means that your insurance company believes that your claim is invalid. Your vehicle insurance claim can either be partially or denied.
For partial denial, your insurer will pay a slight amount of auto insurance settlements for your claim. Your insurance claim can be denied due to the following reasons:
- When you are not covered under the auto insurance policy.
- When your vehicle is not listed under the insurance policy.
- The policy was not effective when the accident occurs( unrenewed policy)
- When your claim exceeds your policy limits.
- If you were driving without a license or under the influence of a substance.
- If the injuries you are claiming existed before the incident or your vehicle has pre-existing damage before an accident.
- In case you lack comprehensive auto insurance coverage. Meaning the filed claim can’t be covered by the insurer.
- If you fail to file an immediate report to your insurer.
- Lastly, if you lie to your insurer either during coverage application or when filing your claim.
After having your claim denied the next step to take is dependent on the type of claim you had filed.
Types Of Auto Insurance Claims
When you are involved in an accident you’ll need to file a first-party or a third-party claim.
A first-party is a claim filed to your auto insurance company. You file this claim with the hope of receiving auto insurance settlements or personal insurance settlements. A first-party claim is usually filed for personal injury protection or medical coverage, if you cause an accident or when the driver at fault is uninsured.
On the other hand, a third-party claim is filed against the other drivers’ insurance company. You should only file this claim when you are certain the other driver caused the accident.
A key difference between the two is that a first-party claim is less likely not to be denied. This is because the contract you have with your insurer requires them to fulfill what is stated in the vehicle policy.
Also, most states have laws that dictate how auto insurance companies should handle their clients. In contrast, for a third-party claim, the contract presented only covers the other driver. This simply means the company you file your case to doesn’t have any primary obligation to your case.
What To Do When Your Claim Is Denied
This process will vary depending on your state of residence and the type of claim you filed.
First-Party Claim Denial
When your first-party claim is denied the first thing to do is to look for the basis of the denial in writing. Your auto insurance company should naturally provide an outlined denial letter if not ask for it.
After scanning through the claim denial you can back up your claim with extra evidence. Evidence like repair estimates, medical bills, pictures of vehicle accidents, and a police report.
After that, you should appeal or ask for an appraisal from your insurer. If all these fail, consider involving a third party. You can file your complaint with your personal injury attorney or your state’s insurance commissioner.
Third-Party Claim Denial
The procedure of this denial is similar to the first-party claim. However in this case you have the option to file a first-party claim with your own insurer. The first-party claim will only go through depending on the kind of auto insurance policy you paid for.
Bad Faith Auto Insurance Claims Denial
There are instances when your insurer can knowingly deny your claim. Insurance if bad Faith is when your insurer unreasonably refuses to cover your claim.
Bad Faith insurance denial covers the following:
- An insurer refusing to pay a legitimate claim
- An insurer failing to appropriately investigate a claim.
- If they ignore valid information that supports your claim.
- Knowingly deviating from claim regulations set by a state.
- And lastly failing to provide reasons for their denial.
- Any auto insurance company that is guilty of bad faith denial is liable for punitive damages.
You can file a bad-faith lawsuit either against your auto insurance company or another vehicle insurance company. However, suing another vehicle company under a bad faith lawsuit will require you to produce concrete evidence.
Evidence that clearly shows that that company was for example involved in corrupt dealings while handling your third party claim. Either way, if you believe your insurer or a different company has denied you access to auto insurance settlements or personal injury settlements, hire a qualified attorney.
You can also seek advice from our trusted insurance consultancy company. We will be glad to serve you.
About Georgia State Auto Insurance
If you are looking for reliable insurance consultants, then look no further than Georgia State Auto Insurance Inc. Our experts will help you with your auto insurance settlements and personal injury settlements.
If you have questions like “Is my settlement taxable?” or “does settlement money get taxed?” Feel free to contact us.
Our experienced staff will help in identifying whether the settlement you receive will need to be taxed. Call us today for an auto insurance quotation!