What to Do if Your Auto Insurance Company Won’t Pay a Claim (2024)
You have options if auto insurance won't pay your claim. The first step is to find out why the claim was denied. It could be due to incorrect paperwork, or your insurer could suspect fraud. However, auto insurance can refuse to pay if your claim exceeds your policy exclusions.
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Tracey L. Wells
Licensed Insurance Agent & Agency Owner
Tracey L. Wells is a licensed insurance agent and Farmers insurance agency owner with 23 years of experience. He is proud to be a local Farmers agent serving Grayson, Georgia and surrounding areas. With experience as both an underwriter and agent, he provides his customers with insight that others agents may not have. His agency offers all lines of insurance including home, life, auto, RV, busi...
Licensed Insurance Agent & Agency Owner
UPDATED: May 29, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: May 29, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Ask an agent from your insurance company to explain why your claim got denied
- Understand your policy’s terms to know whether an insurer is likely to accept your claim
- If all else fails, go to your state’s commissioner or director of insurance for help
If you’ve been in a car accident, it can be helpful to know that your auto insurance policy will help cover the cost of repairs to your vehicle. But what happens when your car insurance company won’t pay your claim? You might be surprised and find yourself asking can a car insurance company refuse to pay a claim?
Unfortunately, there are many instances in which car insurance companies refuse to pay for auto insurance claims. An insurance company can refuse to pay claims for many reasons, and it is up to the auto insurance policyholder to understand their car insurance policy and be persistent. But you need to know what can you do when insurance company refuses to pay?
Read on to learn more about what you can do when what to do when car insurance won’t pay.
What to Do if Your Car Insurance Will Not Pay for a Claim
So, what do you do when your insurance company refuses to pay a claim? One of the first things you can do if your insurance company denies your claim is to reach out for more information. Though many insurance companies now offer apps that allow you to file claims and receive pertinent information, it is best to call your car insurance company directly if you have questions about a claim.
When you call your insurance company, you should be able to speak to an agent or representative who can explain to you why your claim got denied. Be sure to write down anything you do not understand, and ask clarifying questions as often as necessary.
Read More: How to Dispute and Appeal an Auto Insurance Claim
It is important to know the specifics of your insurance policy to understand what is and isn’t covered. If you understand your policy well, you are less likely to be left wondering why my car insurance won’t pay my claim. While your insurance company may have unjustly denied your claim, it’s also possible that your auto insurance claim got denied for a legitimate reason.
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Why Insurance Companies Deny Policyholder Claims
You might ask yourself, “What if my insurance company refuses to pay an auto claim?” Car insurance companies deny policyholders’ claims for many different reasons. The most common reason a claim gets denied is because of limits in coverage.
Your vandalism claim will get denied if you don’t carry a comprehensive auto insurance policy. Your insurance company won’t pay a claim for damage because of an accident if you carry a liability-only auto insurance policy.
If you have your RV insurance claim denied for having liability insurance, you may consider purchasing full coverage insurance in the future. Auto insurance denies claims for trailers that are not registered, as they are not cars. Auto insurance won’t pay out claim usually for damage on your own property or self.
This also means that car insurance refuses to pay medical bills for clients with liability plans. Car insurance not paying out for rental car needed after an auto accident for a client without a full coverage plan is common.
Can an insurance company refuse to pay out? Yes, car insurance can deny a claim if it is not filed properly, or it’s it contains fake or untrue information.
If your car insurance policy doesn't cover the damage or repairs, your insurance company will immediately deny your claim. Therefore, you should familiarize yourself with your policy to avoid filing claims that get denied.Tim Bain Licensed Insurance Agent
Car insurance claims also get denied because of fraud. If you lie on your application or in any information you provide to your insurance company, the company has the right to refuse your claim.
For example, if you falsify your address with your car insurance company to get cheaper rates, you may not think twice about it. But if you file a claim after a car accident, your claim could be denied because of the false information you provided to your insurance company.
When car insurance doesn’t cover damage expenses due to fraud and fraud was not committed, you should try to rectify the situation with the insurer. You don’t want to find yourself saying, “My car insurance denied my claim; now what?”
Other reasons for claim denials often center around the logistics of a car accident. For example, instead of assuming “my insurance company doesn’t want to fix my car,” remember that your car insurance company could also deny your claim if you failed to report an accident right away or if you failed to report personal injuries.
Claim Denial Due to Liability-Only Policy
If you purchased a liability-only insurance policy, there’s a good chance a claim for anything other than an at-fault accident will get denied because liability coverage only helps the people and vehicles you harm in an accident. So if you try to file a claim to have repairs done to your vehicle, it will be denied.
You might be wondering what to do if auto insurance denies claim on a liability-only policy. There’s not much you can do in these cases.
The table below shows some of the most types of auto insurance coverages and what they cover.
Coverage Description
Liability Most states require a set amount of liability coverage that protects other drivers in the case of an accident
Comprehensive This coverage is typically required by your lender or leaseholder. If you own your vehicle outright, this is optional. It will pay for damage from non-accident-related events such as hail, vandalism, and theft.
Collision This provides financial protection for your vehicle. It will pay for damages after a crash.
Personal injury protection This coverage will pay for your own medical costs, including lost wages.
Medical payments Similar to PIP, MedPay covers injury costs but doesn't cover lost wages as PIP does.
Uninsured/Underinsured motorist protection Insurance companies are required to offer this coverage to you, and it will pay for your own damages beyond what another's liability covers when they're responsible for an accident.
Guaranteed auto protection You may owe more on your vehicle than it's worth because of how quickly cars depreciate. This coverage will pay the difference between the value and what you owe if your vehicle is totaled.
Personal umbrella policy This option provides an "umbrella" of coverage over several types of insurance.
Rental reimbursement If your car is a total loss or needs repair, do you have another vehicle you can drive? If you need a rental, you should consider this option.
Emergency roadside assistance You can purchase this option from your insurer or a driving club.
Pay-As-You-Drive or Usage-based insurance This isn't a good choice for everyone, but if you drive very few miles, it might be cheaper for you to purchase this kind of coverage.
Non-owner car insurance This option is for people who do not own a car but borrow one occasionally.
Modified car insurance coverage If you've made modifications to your vehicle, your regular full coverage won't take those changes into consideration when paying for damages. Adding special coverage for those modifications will protect them.
Windshield coverage Windshield coverage will help you pay for the replacement of your broken glass (check state laws for specifics)
Mechanical breakdown insurance This coverage is similar to a manufacturer's extended warranty, and you should weigh the benefits of both a warranty and breakdown insurance to see which is best for you.
If you don’t have a full coverage auto insurance policy, you may be surprised at how little your car insurance helps you in the event of an accident. To ensure your future claims are accepted, you should carry robust coverage on your vehicle.
How to Get Your Auto Insurance Claim Approved
What to do if a car insurance company will not pay a claim? If your claim was denied, but you believe your insurance company should have accepted it, there are a few things you can do to try and get the help you need.
Firstly, you may want your insurer to explain why your claim got denied in writing. Though you may have already heard why your claim was denied, getting an explanation in writing could help you build a compelling case if the denial of your claim was unjust.
Communicate with your insurance company about the logistics of the event in question. If you have pictures, videos, or other documents to prove your claim should be covered, send them to your car insurance agent. You can also send eyewitness statements or a police report if you have any.
What You Can Do When an Insurance Company Refuses To Pay a Claim
You might want to know can auto insurance refuse to pay? Well, that depends on the circumstances. If your car insurance refuses to pay claim after you have provided sufficient proof that it should be covered, you may want to go to your state’s director or commissioner of insurance.
An insurance commissioner or director will ensure that each insurance company follows state and federal laws concerning insurance coverage. The commissioner’s office will review the evidence you provide and decide whether your claim should be accepted.
More About What to Do When Auto Insurance Denies Claim
Your car insurance company can deny your claim if you don’t carry the proper coverage or if you falsified information. If your car insurance won’t pay out, you can take a few steps to get your insurance company to reconsider.
But what if insurance doesn’t pay enough? You may have to take action if your car insurance declines to cover expenses even after appealing the decision. Hiring an attorney can be expensive when auto insurance declines your claim.
The best way to avoid a denied claim is to purchase proper insurance coverage. That way you will not be stuck wondering what to do when insurance won’t help with accident claim. If you do not have a full coverage policy, you can evaluate auto insurance quotes online from multiple companies to see how expensive monthly rates for full coverage would be.
If you crash your car🚘, will your insurance cover it? With only liability coverage, you're out of luck😟. With full coverage, you're set👍. https://t.co/27f1xf1ARb has a guide to help you decide if full coverage is right for you. Check it out here👉: https://t.co/ZzJApDghSE pic.twitter.com/TKIDrrTjhC
— AutoInsurance.org (@AutoInsurance) September 25, 2023
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Frequently Asked Questions
What should I do if my auto insurance company denies my claim?
If your auto insurance company insurance company refuses to pay your claim, here are the six steps you can take:
- Review your policy: Carefully go through your insurance policy to understand the coverage you have and the reasons for the denial. Make sure the denial is valid based on the terms and conditions stated in your policy.
- Contact your insurance company: Reach out to your insurance company’s customer service or claims department to discuss the denial. Ask for a detailed explanation of the reasons behind the decision. It’s important to maintain open communication and express your concerns.
- Document everything: Keep a record of all interactions with your insurance company, including dates, times, names of representatives, and summaries of the conversations. This documentation may be useful if you need to escalate the issue.
- Seek clarification: If the denial is unclear or you believe it is unjustified, ask for clarification on specific policy terms or provisions that relate to your claim. Request a written response from the company explaining their reasoning.
- Consult an attorney: If your claim remains unresolved or you believe you have a valid case, consider consulting with an attorney who specializes in insurance claims. They can provide guidance on your legal options and help you navigate the process.
- File a complaint: If you believe your insurance company has acted in bad faith or violated your rights, you can file a complaint with your state insurance department. They can investigate the matter and provide assistance in resolving the dispute.
Remember, every situation is unique, and it’s important to consider your specific circumstances when deciding how to proceed.
Can I appeal the denial of my auto insurance claim?
Yes, most insurance companies have an appeals process in place that allows you to challenge the denial of your claim. It’s important to know what to do if the insurance doesn’t want to pay the claim.
To appeal, follow these five general steps:
- Review your policy: Familiarize yourself with your policy to understand the coverage and specific provisions related to your claim. This will help you determine if the denial is justified or if you have grounds for an appeal.
- Gather supporting evidence: Collect any relevant documents, photographs, videos, or witness statements that can support your claim. This evidence should clearly demonstrate that your claim is valid and falls within the coverage outlined in your policy.
- Draft an appeal letter: Write a formal letter addressed to your insurance company’s appeals department. Clearly explain why you believe the denial was incorrect and provide a detailed account of the facts surrounding your claim. Attach any supporting evidence to strengthen your case.
- Follow the appeals process: Each insurance company may have a specific process for submitting appeals. Make sure to adhere to their guidelines and deadlines. Keep copies of all documents you submit for your records.
- Consider professional assistance: If you’re unsure about how to proceed or feel overwhelmed, you may want to seek assistance from an attorney or a public insurance adjuster who can guide you through the appeals process.
What are the odds of winning an insurance appeal? There’s no specific number for winning appeals; it really depends on the insurance company and how strong your case is.
Are there any alternatives to resolving a denied auto insurance claim?
Yes, if your car insurance refuses to pay a claim, here are three alternative options to pursue resolution:
- Mediation
- Arbitration
- Legal action
How do you respond to a lowball offer from an insurance company?
If you believe that your auto insurance claim has been underpaid, you can take the following five steps:
- Review your policy: Carefully examine your insurance policy to understand the coverage and provisions related to your claim. Ensure that the payment you received aligns with the terms stated in your policy.
- Contact your insurance company: Reach out to your insurance company’s customer service or claims department to discuss the underpayment. Request a detailed explanation of how they calculated the payment and provide any additional information or documentation that supports your claim for a higher amount.
- Negotiate with your insurance company: Engage in a negotiation process with your insurance company. Present your case, provide evidence such as repair estimates or invoices, and explain why you believe the original payment was inadequate. Be prepared to provide strong arguments to support your position.
- Consider professional assistance: If you are having difficulty reaching a resolution or feel overwhelmed, you may want to seek assistance from an attorney or a public insurance adjuster. They can help assess the situation, advocate for a fair payment, and negotiate on your behalf.
- File a complaint: If all attempts at resolution fail, you can file a complaint with your state insurance department. They can investigate the issue and provide guidance on the next steps to take.
Can I request a review of the denial from my auto insurance company?
Yes, you can request a review of the denial from your auto insurance company. Follow these four steps:
- Contact your insurance company: Reach out to your insurance company’s customer service or claims department and request a review of the denial. Ask for information on the process and the documents or information required for the review.
- Submit additional evidence: Gather any additional evidence, such as photographs, witness statements, or expert opinions, that can support your claim. Present this evidence to your insurance company for their review.
- Follow up: Maintain regular communication with your insurance company to inquire about the status of the review. Be persistent but polite in seeking updates on their progress.
- Escalate if necessary: If the review process does not yield a satisfactory outcome, consider escalating the matter by filing a complaint with your state insurance department or seeking legal advice.
Should I get an attorney once my claim gets denied?
If you have exhausted all your options and still your insurance is refusing to pay claim, you may consider contacting an attorney.
What insurance companies do not want you to know about the claims process is that policyholders have the option of hiring an attorney. When car insurance is refusing to pay claims, they are not thinking about being sued because of it.
An attorney specializing in car insurance could be good if you feel like you have nowhere else to turn. In many cases, the cost of procuring an attorney is high. However, if you were in a serious accident that totaled your car and your insurance company refusing to pay for repairs, or experienced a significant personal injury, an attorney’s help may be worth it.
If you choose to hire an attorney, understand how much they expect to get paid, and stay up-to-date with all issues regarding your insurance claim. Your attorney can keep you updated via email if there are new developments in your case.
An attorney can also help in instances if your car was not fixed properly after insurance claim funds had already been dispersed and the service was completed by an auto body shop.
What is it called when an insurance company refuses to pay a claim?
What is bad faith denial of insurance claims? Often, people refer to a car insurance company not paying claims that are reasonable as “bad faith” insurance.
What is an example of a bad faith claim? If you get into an accident that is covered by your insurance policy, you provided all the necessary documentation, and your insurance company is refusing to pay for repairs, that could be a bad faith claim.
How do you fight a bad faith claim? What is evidence of bad faith? When your insurance company won’t pay the claim or if your car insurance doesn’t want to pay the full value of the claim, you could have grounds for legal action.
Why do insurance companies ignore claims?
Why do insurance companies drag out claims? Lack of communication can happen, but sometimes it is not intentional.
You probably want to know, how can I speed up my insurance claim? Well, instead of assuming “my auto insurance company won’t pay,” follow up with them if you haven’t heard back in several weeks.
Is there a chance that an insurance company can refuse to pay the insured?
Can car insurance refuse a claim? Insurance companies may deny claims by citing policy exclusions, insufficient documentation, or alleging non-disclosure of information.
How do I argue an auto insurance claim?
To argue an auto insurance claim, gather evidence, document damages, obtain witness statements, review your policy, and communicate clearly with your insurer. If needed, seek legal advice.
How often do insurance companies deny claims?
Legitimate claims are not often denied, but it can still happen. When your insurance won’t pay for car repairs that they should, it’s best to appeal the decision.
Can a car insurance company refuse to pay a claim?
Auto insurance won’t pay claims for those with liability insurance only who are filing for personal damage or personal injury.
What does subrogation mean?
Subrogation moves financial responsibility to the insurance provider and then allows the provider to require the insurer to pay what was originally owed. How often is subrogation successful? That depends on different factors include how strong the case is.
Do insurance companies always pursue subrogation? No, whether they decide to or not will be impacted by the specific circumstances of the incident.
What can I do if my insurance company won’t pay?
You may still be wondering, exactly what can I do if my car insurance company won’t pay? If you have provided all of the necessary documentation to proof why the claim should be covered, you can go to your state commissioner of insurance.
What is a common reason a car insurance claim could be denied?
What is one of the most common reasons for a claim being rejected by an insurance company? A few common reasons claims could be rejected include misrepresentation of the claim or inadequate coverage.
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Enter your ZIP code below to view companies that have cheap auto insurance rates.
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Tracey L. Wells
Licensed Insurance Agent & Agency Owner
Tracey L. Wells is a licensed insurance agent and Farmers insurance agency owner with 23 years of experience. He is proud to be a local Farmers agent serving Grayson, Georgia and surrounding areas. With experience as both an underwriter and agent, he provides his customers with insight that others agents may not have. His agency offers all lines of insurance including home, life, auto, RV, busi...
Licensed Insurance Agent & Agency Owner
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.