What to do When an Insurance Company Denies Your Claim
Were you involved in an accident and the insurance company denied your
claim? I’ve mentioned in this blog repeatedly that insurance companies are not on your side.
These are entities that are dedicated to one thing and that’s making profits. And as a result, they will delay, they will deny they will diminish your claims any way that they can.
If you talk to insurance adjusters, they will likely dispute this. They’ll tell you that they’re being practical about how severe an accident was and that is the basis of their decision about how much to compensate people. Well, I’m sorry. I’ve seen it firsthand. I’ve seen insurance companies deny claims or diminish the value of claims, only to ultimately pay tens of thousands of dollars once a lawsuit was filed. So, trust me on this. When dealing with insurance companies, they are not on your side.
So, what do you do when an insurance company denies your claim? First of all, we have to clarify which insurance company it was. There are likely going to be insurance companies on both sides of this accident. You may have insurance and so may the guy who you think caused the accident. Insurance denials can come from either side.
What To Do When The Defendant’s Insurance Company Denies Your Claim
Let’s start with what to do when the other insurance company denies your claim. Let’s take a hypothetical. You were involved in an accident and a guy hit you from behind – a rear end accident. You get his or her insurance information and you file a claim with State Farm or Allstate or whoever that person has for their insurance.
State Farm investigates. They talk to their insured, maybe they interview you (though you may not want to provide a recorded statement to their insurance adjuster). Maybe they analyze the property damage involved in the accident. And then you get a letter from them that says that they have denied your claim. What do you do?
You don’t have many choices in that circumstance. If you only have a property damage claim, maybe you can get compensation from your insurance company.
But if you have injuries and their insurance company denied your claim, what do you do? You really only left with one choice. And that is to file a lawsuit against the other party.
That’s the only way the insurance company is going to respond. You have the right to get your impartial day in court so that you can get the facts on the record. You get to argue your case and let the judge or jury decide whose at fault for the accident.
I always recommend to people – get an attorney to represent you. But this is particularly true if you’re going to court. Those people represented by lawyers have a far greater success rate than those who are not.
But the problem is in this case, and I’ve seen this countless times is that if your claim was already denied by an insurance company, there’s a very good likelihood that the facts that are not favorable to you and you’re asking a lawyer to get involved in a case that has already been denied.
Now I’m not saying there aren’t lawyers who will do it or who won’t do it, but I actually did a video on the various reasons why a lawyer may not get involved in a case and an insurance claim already being denied was one of them. It’s a tough burden for a lawyer to overcome though not impossible.
If you get a lawyer, the lawyer takes care of moving the case forward. What if you don’t get a lawyer – what do you do? Well, you can file a lawsuit on your own behalf.
There’s two different kinds of cases I want to talk about here. First is the small case with minimal property damage and/or very small injuries.
In Illinois, we have something called small claims court. And if you have a case worth $10,000 or less, you can pretty much file that a case or that claim on your own in small claims court. That’s what it’s made for – people to represent themselves on small claims.
If you have a larger claim, i.e., you have significant injuries, you’re going to file in district court. That’s more complicated. But if you go to your local county courthouse (in Chicago it’s the Cook County court house on Washington Street – or there are local districts like in Rolling Meadows and Skokie), there are people there who can help you through that process.
Also, it may not be that the insurance company totally denied your claim. But what if they said that you were 50% responsible for your claim? Well, then you have a choice. You can either accept their allocation of responsibility or liability, or you can fight them. Check out this blog for more information on when you might accept some fault for an accident.
Oftentimes when an insurance company puts 50% on you or 70% on you, you can negotiate a percentage of fault.
What To Do When Your Own Insurance Company Denies Your Claim
Let’s switch gears for a second. So now let’s talk about what to do when your own insurance company denies your claim or does something that you don’t like.
The first place that this often pops up as in your property damage claim. Let’s take another hypothetical. You were involved in an accident and your Toyota is a total loss. Your insurance company Allstate is compensating you but much less than you think your vehicle is worth. What do you do in that situation?
Or, let’s say that you’re filing a claim for your pain and suffering and medical bills with your own insurance under your uninsured motorist or underinsured motorist coverage and Allstate is offering you much less than you think your case is worth. What do you do?
At this point, your own insurance company becomes adverse – meaning they are basically the same as if they were the insurance company for the defendant and you’ve got to treat them as such.
I have discussed before on this site about the fact that you have to give a recorded statement to your own insurance company. So you still have an obligation to work with them, provide them your medical bills, whatever it may be. And if you don’t, they could deny your claim altogether.
I’m not saying don’t work with them. I’m just letting you know that they are now adverse. You’re trying to get money from them. And they’re going to think in their own best interests, not yours.
If they deny your claim or low-ball you, what do you do? Some people think that, you need to file a lawsuit against your own insurance company, but generally speaking, that’s not what happens.
Appeal Not Lawsuit
You need to check your insurance policy, but generally speaking, there’s an appeal process that you have an obligation to follow. FYI, it could be that you have to appeal in writing within 30 days (or another time period). So we recommend immediately requesting a certified copy of your insurance policy from your insurance company, and advising them in writing that you are appealing their decision.
Normally there’s an arbitration clause in your own insurance policy. That means you agreed by signing your insurance contract, that you’re not going to file a lawsuit. Rather, you are going to arbitrate your dispute.
The way arbitration works, generally speaking, is that you go to an association, like the American Arbitration Association and you file a request for arbitration. But again, check your specific insurance policy.
Often there will then be a three-person panel of arbitrators who are attorneys or judges in your jurisdiction. You get your ‘day in court’ except its in front of the arbitration panel. Arbitration will be less formal than going to court and that may benefit you and your case.
Once the evidence is submitted and you (and potentially other witnesses) testify about the incident, the arbitrator rules.
One reason that insurance companies like arbitration is that since the arbitrators were past attorneys or judges, they’re not going to be moved by emotion like a jury might. So, insurance companies may be able to control the amount of damages you are awarded.
By the way, you can obtain a lawyer to represent you in arbitration against your own insurance company and again we strongly recommend that you do so. Especially if you have severe medical injuries. If it’s just a property damage claim, you probably don’t need a lawyer there on your behalf.
Thanks for checking out this article on what to do when an insurance company denies your claim. If you want to speak with the attorneys at the Chicago Legal Group reach out to us.
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