What to do if a car insurance company denies your claim

Dealing with a car accident can be stressful enough, but what happens when your insurance company denies your car accident claim? It might feel like you’re stuck in a tough spot with nowhere to turn. But don’t worry! Even if your car insurance claim is denied, you still have options to explore.

From checking the fine print of your policy to seeking external help, this blog will walk you through some simple steps to understand why your claim was denied and what actions you can take to overturn that decision.

What can you do after your insurance claim was denied?

So, you’ve gone through the insurance claim process, and the insurance company has denied your claim. When this happens, it might feel like a big setback. But don’t lose hope—there are several steps you can take to address the situation. With some persistence and possibly some negotiation, you still have a shot at getting things sorted out. Here’s our helpful step-by-step guide on what to do next:

1. Figure out why they said no

After you tell your car insurance company about an accident, a person called an insurance adjuster will take notes on what happened. This adjuster looks at all the information and decides if your insurance will cover the accident or not. If they decide your insurance doesn’t cover the accident, the company will send you a letter explaining why they made that decision.

The claim denial letter that tells you your claim was denied has important details. In the letter, the insurance company has to tell you why they said no. This could be anything from “You are not covered for this” to “We need more proof of damage.” The letter will also point out parts of your car insurance policy that explain why they denied your claim. Check these sections yourself and compare them to make sure they match.

Common reasons why claims get denied

An inactive policy, waiting too long, and lack of proof are just some of the reasons why insurance companies deny claims. Knowing why your insurance claim was denied helps you figure out what to do next, like giving more information, asking them to reconsider, or getting advice on what to do. Here are some common reasons why you may have a denied car insurance claim:

You are not covered for it

Think of your insurance like a safety net with some holes. If what happens to your car falls through one of those holes, such as damage types or situations your insurance doesn’t cover, then the insurance won’t help with the costs or repairs.

Your policy was not active

It’s like having a ticket to a show, but you can’t get in if the show was yesterday and your ticket is for today. If your insurance payments were late or the policy ended before the accident, it’s as if your insurance “ticket” wasn’t valid when you needed it. This is why it’s important to renew your car insurance on time.

You waited too long to tell them

Most insurance companies often need to know about car accidents soon after they happen. They might say it’s too late to help if you wait too long to tell them. Check your insurance policy to learn how soon after an accident you must file your car insurance claim.

There was not enough proof

If something happens to your car, your insurer needs proof, like pictures or a police report, to understand what happened. It’s like if a friend tells you a wild story, you might want to see pictures before you believe it.

You broke the rules

If the accident happened while doing something that’s a no-go (or illegal) according to your insurance, like driving way too fast or being under the influence, it’s like breaking a rule in a game. If you break the rules, you might not get the prize, which in this case is the insurance covering your accident.

The insurance company believes your claim isn’t real

Imagine if someone said they were too sick to go to school, but you saw them playing outside later. If your insurer thinks an injury claim from a car accident isn’t true—like if they think the injury was made up or didn’t happen in the accident—they won’t agree to pay for it. It’s their way of ensuring they only help with real problems, not made-up ones. This is why honesty and providing all the necessary information and evidence for your claim are essential.

The amount exceeds your policy limit

Every policy has a limit to how much your insurer will cover. For example, Ontario’s minimum car insurance requirement is $200,000 in liability car insurance. Say you are at fault for an accident, and the other person’s claim for damage and medical bills equals $350,000. Technically, your claim isn’t denied in this scenario, but since your coverage limits are lower than the claim, you will be liable for covering the remaining $150,000.

2. Collect more proof

Imagine your insurance claim is like a jigsaw puzzle. The insurance company needs to see the full picture before deciding to help pay to fix or replace your vehicle or any medical expenses. Each piece of evidence you bring is like a puzzle piece. The more you have, the clearer the whole story is to them. If you don’t have enough proof, they might not get your side of the story, leading to a denial of your claim.

Here are the types of proof that the insurer may ask for:

Pictures and videos

Take lots of photos or a video showing the damage to your car, where the accident happened, how the road looked, and important signs or traffic lights around. These visuals show the insurance company a mini-movie of what happened.

Police report

This is your official note about the accident written by the police after reporting the car accident. It tells the insurer who was involved, what happened, and (sometimes) who was at fault.

Witness statements

If anyone saw the accident, what they say can really help. Having a witness who can back up your story is a great way to solidify your case.

Medical records

If you were injured, these documents prove your injuries are real and happened because of the crash.

Repair estimates

Getting a price from an auto repair shop on fixing your vehicle shows the insurance how serious the damage is.

3. Review your insurance policy

Your insurance policy is a deal between you and the insurance company. They agree to cover certain things if you run into trouble, like if you get into an accident or someone steals your car, but there are also things they won’t cover, like normal wear and tear on your car or if you were driving unsafely. Understanding your policy is like knowing the rules to help you play the game better. It’s important for you to know:

Limits on what they will pay

Your policy will only pay up to a certain amount. Knowing this helps you understand how much help you can get and if you might need more insurance coverage.

How much you have to pay first

Your deductible is how much you must pay before the insurance starts paying. It’s key to know this so you’re not surprised by how much you have to pay out of your own pocket after an accident.

What’s not covered

Knowing what your policy doesn’t cover saves you from unexpected surprises and helps you decide if you need extra insurance for those things, like comprehensive coverage for non-collision-related accidents, like theft, vandalism, or damage from falling objects, or collision coverage for at-fault accidents with another vehicle.

Sometimes, your claim might get denied because of a specific detail in the fine print you didn’t know about. These tiny details in your insurance policy can explain a lot, including why your claim was denied. It’s like reading the instructions for a complex board game; if you don’t know the rules, you can’t play well.

Once you know the reason behind the denial, you can look for ways to argue against it. For instance, if they based their denial on a confusing part of the policy, you might be able to argue for a different understanding that benefits you.

By really getting to know your insurance policy, you’re setting yourself up to handle the claims process better, understand any decisions about your claims, and figure out ways to challenge a denial if it happens. Talk to your insurance company or insurance broker to help you better understand your insurance policy.

4. Talk to your own insurance provider

If you’re stuck with the other driver’s insurance, tell your insurance company about it. They might cover you for now and then deal with getting the money from the other insurance later. This is especially helpful if the other driver doesn’t have insurance.

When talking to your insurance company:

• Have all your info, like the accident report, pictures, and any emails or letters from the other insurance company, ready to show.
• Tell them you tried to sort things out with the other insurance, but it didn’t work, and share why they said they won’t pay.

Negotiating with the insurance adjuster

Talking to the insurance adjuster is a mix of being prepared and knowing how to negotiate. Here are some tips:

• Be clear on how much fixing your car or any hospital bills will cost. Having quotes or estimates to show them helps a lot.
• It’s easy to get upset, but staying calm and talking things out calmly usually gets better results.
• The first offer might be too low, but it’s just a starting point. If it doesn’t sound right, explain why it should be more, using your quotes or reports as backup.

5. Write an appeal letter

When you disagree with the insurance company’s decision about your claim, writing a letter is like raising your hand to say, “Wait a minute, let’s look at this again.” Writing a letter that grabs attention is about being clear, bringing good evidence to the table, and staying professional. It shows the insurance company you mean business and that you’ve thought things through. Sometimes, a well-crafted letter is all it takes to get them to reconsider their decision.

Here’s how to write a letter that not only gets read but also makes them think twice:

Say what you want upfront

Begin your letter by clearly stating you’re not okay with their decision on your claim. Include the claim number and the date they told you no. It’s like starting a conversation by saying exactly what’s on your mind.

Keep it short and sweet

Your letter should get to the point quickly. Imagine you’re telling a friend about something important, but you only have a minute.

Pack it with proof

Attach or mention any new proof you have that shows your side of the story. This could be more photos of the accident, a note from an expert, or anything else that helps strengthen your case. If something in your insurance policy supports your claim, mention it.

Maintain a calm tone

Even if you’re frustrated, keep the tone of your letter professional and calm. You’re trying to convince them, not start a fight. It’s like trying to get someone to see your point of view by talking it out, not yelling.

Edit, edit, edit

Before sending it off, double-check your letter for spelling mistakes or awkward sentences. Think of it as ensuring you look your best before an important meeting. You want your letter to be as clear and easy to understand as possible.

6. Get advice from a lawyer

When your insurance claim isn’t going anywhere, sometimes you need to call in some extra help for claims advice. Talking to a car accident lawyer or personal injury lawyer who knows about car insurance can help turn things around. The lawyer can step in and give things a nudge.

Insurance policies can be confusing. Lawyers who work with insurance regularly know how to find the shortcuts and avoid the traps. They can look at your claim denial and know the best way to fix it. Plus, lawyers know how to talk to insurance companies in a way that makes them listen. They understand all the legal jargon and can help make your points clear and strong. Furthermore, dealing with a denied claim can take much of your time and be stressful. Having a lawyer means you have someone to handle the hard parts so you can relax a bit.

Finding the right lawyer

Not all lawyers know the nitty-gritty of insurance law. You want someone who deals with insurance companies and knows how your type of claim works. You also want a lawyer who’s good at winning these kinds of fights. Check out what others say about them or ask how they’ve dealt with cases like yours. Finally, lawyers can be pricey, but many will only ask for money if you win your case. Make sure you understand how they charge before you say yes.

7. Alternative dispute resolutions

When you’re stuck in a back-and-forth with your insurance company, and it feels like you’re not getting anywhere, there’s another path you might not have thought about using different methods to sort out the dispute without going to court. This includes things like mediation and arbitration and sometimes getting someone else to take a look at your case. Let’s dive into these options and see how they could help:

Mediation

Imagine you and the insurance company are struggling to agree, so you bring in someone who doesn’t take sides to help you talk it out. This person, a mediator, helps everyone explain their side and tries to find a middle ground. It’s not as serious as going to court, and often, you can reach an agreement that everyone’s okay with.

Arbitration

This is a bit like having a private judge who isn’t in a courtroom. In arbitration, the arbitrator listens to both sides and then makes a decision. Usually, you have to stick with whatever they decide. Sometimes, you can agree that the decision doesn’t have to be final, which means you could still go to court if you don’t like what they say.

Third-Party Reviews

If you’re unhappy with how the insurance company handles your claim, you can ask someone else (a third party) to review everything. This person isn’t part of the insurance company and will look at your case and the decision on your claim again. It’s like getting a second opinion.

With a third-party review, you get someone new to look at your case, which can be great if you think the insurance company isn’t playing fair. It’s usually less formal and can be quicker and less expensive than going to court. However, even with a new review, there’s no sure thing that the decision will go your way, and not every claim might be right for this kind of review.

8. Going to court

When deciding to take your insurance claim to court, knowing when this step is the right move is important. Here are a few examples of when to consider court:

You have a serious dispute

If you’re arguing over a significant amount of money or a serious injury, court might be your best shot. When talking it out or trying other ways to solve the problem hasn’t worked, suing might be your next step.

You have exhausted other avenues

It’s a good idea to have tried to solve the issue through other ways, like mediation or arbitration, before thinking about court. If those don’t get you anywhere, it might be time to consider legal action.

Keep in mind that there’s a time limit for filing a lawsuit, which varies depending on where you are in Canada. However, it is usually between one and two years from when the accident happened or when you first noticed the issue. If you wait too long, you might lose your chance to sue.

Conclusion

Getting your claim denied by your car insurance company can feel like hitting a bump on the road, but it doesn’t mean the end of your journey. Start by understanding why your claim was denied, and then look at your policy to see if there might have been a misunderstanding or something you missed. If things still aren’t adding up, gather all your evidence, and don’t be shy about going back to your insurance company to discuss it again. Sometimes, bringing in a neutral third party, like a mediator, can help sort things out. If you really need to, getting a lawyer and considering court is an option, too.

Remember, it’s about knowing your rights, being prepared with all your info, and sometimes needing a bit of patience and persistence to get through the process. Don’t be discouraged by an initial “no” – with the right approach, you might be able to turn things around.

Get an auto insurance quote 1-866-724-2372

FAQs for what to do if a car insurance company denies your claim

What if the insurance company denies your claim?

If your insurance company says no to your claim, first understand why they denied it. Check your policy details to see if they might have missed something. You can also gather more evidence and try to talk to them again. If that doesn’t work, consider getting help from a mediator or a lawyer.

How long does an insurance company have to investigate a claim in Canada?

In Canada, insurance companies usually have about 30 days to look into a claim. This can vary, so it’s good to check your policy or ask them directly. They might need more time for complicated cases, but they should keep you updated.

Can insurance reject claims?

Yes, insurance companies can reject claims for several reasons. It might be because your policy doesn’t cover the situation, there wasn’t enough proof, or the claim was filed too late. Always check your policy and the reason they give for the denial.

How do you write a letter to an insurance company for claim rejection?

Start by stating you’re writing because your claim was denied, including your claim number. Be clear and polite, and explain why you think the decision should be reconsidered. Attach any new evidence you have that supports your claim. End it by asking them to review the decision. Remember to keep a copy for yourself.

If you have any questions, contact one of our local branches.