How to Appeal Car Insurance Claim Denial

June 2, 2021 by Barry Zlotowicz Law Firms 

How to Appeal Car Insurance Claim Denial

Did you file a claim with your auto insurance and your claim was denied? Check out this short article to learn how you can appeal a car insurance claim denial.

If you’re reading this article, chances are, you may have recently got in an auto or motorcycle accident, and this may be your first time dealing with insurance company.

After you file your claim, you may be surprised to have your claim denied (for one of many reasons). If that’s the case, then what I’m about to tell you, will help guide you through the process of appealing your claim.

FYI, this article really applies when you have primarily property damage or minor injuries – not moderate to severe injuries. In cases involving larger injuries, I always recommend that people talk to a personal injury attorney.

If you’d like to speak with us about your case, call 1-847-305-4105.

There are two situations here:

First, you get hit by a third party and you file a claim with their insurance, and they deny your claim. What do you do?

Second, what if you file a claim with your own insurance and your own insurance denies you, what do you do?

Insurance Claim Denied by Third Party

Let’s take the first scenario where you get hit by a third party and they deny your claim. You only have two options:

First, you file a claim with your own insurance and hopefully you have collision coverage. Or, second: you file a lawsuit against the third party (not the insurance company).

If you only have property damage or minor injuries, and your total damages are under $10,000, you can file a lawsuit in small claims court. Small claims court is really made for people to file lawsuits on their own without an attorney.

Claim Denied by Your Own Insurance Company

The focus of this article however is the scenario when you’re denied by your own insurance company.

The first thing you should do is make the insurance company send you a certified copy of your insurance policy.

Then ask them to show you exactly what clause they’re denying your claim based on.  They will likely do this anyways but tie them to a denial decision and make sure you get it in writing.

Don’t just take your insurance company’s word for it. Insurance companies will try to get out of paying you any way they can.

Next Steps to Appeal an Insurance Claim Denial

I’m going to use my own insurance policy from State Farm as a guide for the rest of this article.  I was able to obtain it from my insurance agent within five minutes of asking.

In my policy it clearly sets forth the terms within which I have to appeal a denial of a claim.

Hint: Don’t wait to appeal the denial because one of the terms in your policy may be a time limit within which you have to file an appeal (especially if you have a sub-standard insurance carrier – one of those lousy insurance companies you see on late night television. They may very  likely have a 30 day timeline within which you have to file an appeal.

If you don’t appeal in time, they’ll try to use that against you to deny your claim and deny your appeal.

Pursuant to my own insurance policy, if I am denied by State Farm, there are very simple instructions including: I have to let them know in writing within a certain time period that I am appealing the denial of the claim.

What Information Must Be in an Appeal Letter

One thing I want to caution you on is your insurance contracts may also set forth the information that you have to provide them in your appeal letter. Some insurance contracts may require that you provide your evidence up front.

So, for example, let’s say your car is a total loss and they value it at a thousand dollars. You, however, get an appraisal that values it at $3,000.

It may be that in your appeal letter, you have to document the fact that you have evidence that proves that your car is worth more and you have to provide that to them in the appeal letter.

I just want to reemphasize take a look at your insurance policy. It’ll set forth the grounds upon which you can appeal and the means by which you’re supposed to do it.

Arbitration of Insurance Claim Denials

Back to my insurance policy. It also provides that I cannot file a lawsuit against the insurance company. Rather, I have to submit to what’s called arbitration.

Many people aren’t aware of the fact that when you signed your insurance contract, you likely agreed to arbitrate your dispute against your insurance company instead of filing a lawsuit.

How Does Arbitration Work?

In my policy, I have to pick one arbitrator (you can find one online or go to the American Arbitration Association or call your local bar association for a referral).

Then my insurance company, State Farm picks an arbitrator. And then the two of those folks get together and they pick a third person so that there’s an odd number of arbitrators on the arbitration panel.

Those three folks then are going to set forth the rules within which you’re going to arbitrate your claim. They’re going to tell you about discovery (what information you can obtain from the other side if any).

They’re going to tell you about the evidence that you have to submit.

They’re going to tell you about all the rules and requirements that go with the arbitration.

Do I need an Attorney for an Arbitration?

The arbitration date gets set and the arbitrators are picked. You might want to consider hiring an attorney to represent you. However, if there’s only property damage, chances are, you’re not going to be able to find an attorney unless you want to pay on an hourly basis.

As I mentioned before, this is something you can do on your own. Arbitration is an informal process. It’s not as informal as mediation, for example, where the parties just come together to try and settle a claim, but it’s still pretty informal.

The arbitrators are likely going to be retired judges or very experienced lawyers. They know you’re representing yourself pro se (or) on your own. And they’re going to be pretty laxed about how you submit evidence, about your appearance and the demeanor that you have to take within the arbitration.

So, don’t be hesitant to go arbitrate this matter on your own. You can do this.

The Benefits of Going to Arbitration

What are some of the pros of an arbitration? One is you get a decision made much quicker than if you file a lawsuit. Even if you file in small claims court, with an arbitrator, you can get an arbitration date set in six or eight weeks – which is the equivalent of your “day in court” so to speak.

In addition, you’re picking one of the arbitrators. Arbitrators are generally speaking going to probably be retired judges or experienced attorneys who understand the complexities of a property damage or personal injury case.

Conversely, if you file a claim in small claims court, you don’t know who the judge is. It could be a traffic ticket judge that was reassigned to the small claims court.

So, the experts are going to really make a decision about who’s at fault for your accident and whether you should recover or not.

How to Prepare for an Arbitration

So how do you prepare for an arbitration? Well, again, I already mentioned that the arbitrators are going to tell you the rules of the arbitration.

In short, you will have to present your evidence to the arbitrators at the arbitration.

What Evidence do I Need

For example, if your car was totaled, you’re going to want to get your own appraisal done. Note that you may have to have that appraiser actually testify at your arbitration. Again, the rules set forth by the arbitrator will tell you how you have the handle this.

In addition, get your receipts together, get the police report, and any documentation you have to support your claim as you’re going to have to admit it at the arbitration as evidence.

Same for any medical records, medical bills and photographs of property or personal injury.

What Should I Wear to the Arbitration?

When you attend the arbitration, put on a decent shirt and a pair of slacks. Something to look presentable – remember you’re trying to defeat a multi-billion dollar insurance company. So, the more professional you look, the more respectable you look, the better off you’re going to be.

After the Arbitration

After the arbitration, there may be a couple of weeks’ time lag where the arbitrators meet and they come up with a decision regarding your appeal. They need to get the numbers in order and get the decision written out and provided to you.

Win or lose, you’ll have represented yourself and you won’t have taken a denial from an insurance company lying down, which is the thing I really want to emphasize here.

We’ve got to fight the insurance companies because otherwise they’re going to try and low ball us every single time they can.

If you are about to go to arbitration and would like a free strategy session with us, call 1-847-305-4105.


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