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Why Do Insurance Companies Deny Claims?

You’re involved in a Los Angeles accident. Someone else is at least partially to blame for your injuries. You’re faced with expensive medical bills, repairs to damaged property, and maybe even a temporary loss of income because of the extent of your injuries. Recovering compensation from the at-fault party’s insurance company should be straightforward. However, this isn’t always the case.

Insurance companies aren’t interested in helping you get the money you deserve after an accident. They’ll do whatever they can to prevent or limit your payout. Many will even deny your seemingly legitimate claim.

It’s important to consider why insurance companies commonly deny insurance claims. The answer can be incredibly helpful as you fight for the money you deserve. If you need more assistance, contact the personal injury lawyers at Citywide Law Group today. We have over 20 years of experience helping accident victims get the money they deserve.

Problems With the Insurance Policy or Coverage

Insurance companies will carefully review the insurance policy held by the person who caused your accident or injury. Companies often reserve the right to deny a claim if there’s an issue with that particular policy.

No Valid Coverage Exists

Insurance companies will only pay if there’s a valid insurance policy in place. Let’s say you suffer a broken bone in a slip and fall accident in a small Mom & Pop Los Angeles store. After the accident, the owner agrees to give you the contact information for their insurance company.

However, when you contact the insurer they find no record of a policy covering that particular store. It turns out that the owner recently opened a new store and failed to make the proper changes to his insurance policy. As a result, there’s no valid coverage and the insurance company can deny the claim.

Coverage Has Lapsed

Insurance companies will deny claims if it determines that coverage has lapsed. There are a few different reasons why insurance coverage may lapse: failure to pay premiums on time, insurer unilaterally canceled the policy, or the insurance company no longer exists. Again, insurance companies will only approve claims when a valid and up-to-date insurance policy exists.

Damage Excluded From Coverage

Insurance companies will carefully review your request for benefits to determine the cause of your injuries. All insurance policies contain a list of things that will not be covered. The insurer will deny your claim if it finds that the type of damage you’ve sustained falls under a policy exclusion. Common examples of policy exclusions include intentional acts of vandalism or damage caused by storms.

Driver Exclusions

All vehicles registered in the state of California must be covered by a valid insurance policy. However, a valid insurance policy doesn’t necessarily mean that all drivers of a particular vehicle will be covered.

In fact, it’s fairly common for insurance policies to contain driver exclusion clauses. This simply means that a legitimate policy exists, but that certain drivers are not covered. So, an insurer can reserve the right to deny your claim if your injuries were caused by a driver who’s not covered by the policy.

Disputes Over Liability and Fault

Insurance companies will search for any reason to deny a personal injury claim. There are times when the denial has nothing to do with coverage, but rather with the circumstances surrounding the accident itself.

Cause of the Injury Contested

It’s important to provide the insurance company with substantial proof that your injuries are a result of the accident. Companies will refuse to approve your request for compensation if your claim lacks support and evidence.

The insurer may justify its denial by claiming that it believes your injuries were pre-existing at the time of the accident or that your own conduct made the injuries worse. Always provide clear evidence to link your injuries to your accident.

The Extent of Your Injuries Is Disputed

An insurer may deny a claim if it believes that you have exaggerated the extent of your injuries. For example, the insurer may not believe that you’ve suffered a spinal cord injury after a seemingly minor car accident. In the insurer’s opinion, this is not the type of injury that typically results from a low-impact crash.

It’s essential to provide details information – including medical reports and evaluations – to support your demand for compensation. It’s important to provide clear and direct evidence to establish that all of your injuries were a result of the accident.

Lack of Evidence To Establish Fault

Insurance claims are often denied if there is a dispute as to fault or liability. Companies will only agree to pay you if there’s clear evidence to show that their policyholder is to blame for your injuries. If there is any indication that their policyholder isn’t responsible the insurer will deny your claim.

Claims may also be denied if there’s evidence to show that the policyholder isn’t entirely to blame for an accident. In California, anyone who contributes to an accident can be held responsible for resulting injuries. Insurance companies will carefully investigate your accident to determine if you or anyone else had a contributing role. If there’s evidence to show that more than one person is to blame, an insurer will likely reject your claim for benefits.

Bad Faith Practices

Insurance coverage exists to make sure that injured victims have resources available to them after an accident. However, insurance only works when policyholders and insurance companies both hold up their end of the bargain. If a policyholder purchases coverage and makes timely payments, a company has a legal obligation to genuinely consider any claims that may be submitted. Unfortunately, some insurers don’t play by the rules and deny claims in bad faith.

Claims Denied Without Proper Investigation

Insurance adjusters have to do their due diligence when considering an insurance claim for benefits. This due diligence should include an investigation into the claim and relevant circumstances. How do you know if your claim wasn’t investigated before it was denied? Always make sure the insurer provides a legitimate reason for the denial. The fact that an insurer denied your claim without justification or reason should be a red flag.

Failure to File a Timely Claim

It’s important to act quickly and contact an insurance company as soon as you can after your accident. Most companies place a strict limit on the amount of time you have to file a personal injury claim. In most situations, you’ll have to submit your claim within a “reasonable” amount of time after your accident.

Some companies have specific definitions for what is reasonable, while others do not. It’s possible that your claim can be denied if the company doesn’t feel that you filed your claim on time. In many cases, this could be a bad faith tactic specifically designed to prevent you from recovering compensation from a legitimate claim.

You’re Not Represented By an Attorney

Insurance companies will not hesitate to take advantage of you if you’re not represented by an attorney. They’ll suspect that you’re not entirely familiar with your legal rights and will use that against you. They may unnecessarily delay the processing of your claim or make it difficult for you to speak with a representative.

These strategies are designed to make you buckle under financial pressure and eager to accept any lowball offer they may extend. You can protect yourself and make sure that your claim is handled with the attention it deserved by hiring an attorney to handle your claim.

Need Help?

Has an insurance company denied your claim for benefits following a Los Angeles accident? Contact Citywide Law Group for immediate legal assistance. The fact that your claim was denied doesn’t mean that your fight for compensation is over. Our personal injury lawyers will carefully review your claim and determine why it was denied. Once we’ve identified the reason we can determine whether its best to file an appeal or consider alternative legal action.

We’re here to help you get the money you deserve after an accident. We won’t let an insurance company stand in your way. Call us to schedule a free consultation with our skilled legal team today.