Can a Car Insurance Company Refuse to Pay a Claim in California?
Yes, a car insurance company in California can deny your auto insurance claim. Whether you file your claim under an at-fault driver’s insurance policy or your own uninsured motorist policy, insurance companies often act to protect their interests above yours. Although insurance companies sometimes have valid reasons for denying claims, some denials are in bad faith.
If you have been denied coverage after being injured in an accident, you don’t have to accept it as final. Our experienced California car accident lawyers can investigate your accident and advise you of your rights and options. We may be able to refute the findings and recover substantial damages from the insurer on your behalf. Contact us today to schedule a free consultation.
What Makes an Insurance Company Deny a Claim?
Insurance companies are in business to make money, and paying as little as possible on claims helps them maximize profits. They use lawyers, investigators, and claims adjusters to scrutinize you and your accident to look for legal grounds and technicalities to deny your claim. They will pounce on any opportunity they can find to blame you for the accident, minimize your injuries, or invalidate your claim.
Lack of Coverage
The insurance company may claim that the policy does not cover your accident. A lack of coverage could result from the driver canceling the policy, failing to pay premiums, or failing to renew the policy after it expired. Insurance companies are not required to pay claims if the policy was not in effect at the time of the accident.
If your insurance policy has lapsed, California’s no pay-no-play law prohibits you from recovering damages for your pain, suffering, and other non-economic losses. The law allows you to recover economic damages for your financial losses if you were uninsured. However, insurance companies know many accident victims are unaware of that law. Thus, they may deny your claim anyway.
If the driver was someone other than the vehicle’s owner, you should be able to recover damages from the owner’s insurance policy. However, the insurance company could deny your claim if the owner’s insurance policy specifically excluded the driver from coverage.
Violation of Policy Terms
The insurance company could also deny coverage if it determines the policyholder breached the insurance contract. For example, the at-fault driver’s license may have been suspended, or the driver may have been committing a crime when the accident occurred. Such actions may constitute breaches under the insurance policy, relieving the insurer of its duty to indemnify or pay the claim.
Insurance companies can also deny coverage when a driver fails to stay within the scope of the insurance contract. For instance, if a driver uses a vehicle for business purposes, such as delivering newspapers or visiting job sites, it may fall outside the scope of coverage for a private automobile insurance policy. Typically, drivers must obtain commercial insurance policies for business purposes.
Drivers may also violate insurance company contracts when they do the following:
- Give the insurance company the wrong address for where the car is stored
- Drive with a medical condition, such as epilepsy, that makes driving unsafe
- Knowingly drive an unsafe vehicle
- Operate a drive-for-hire service without informing the insurance company
Failure to Report the Accident
If you are involved in an accident that causes death or injuries, you must report the car accident to the nearest law enforcement agency within 24 hours. You can usually accomplish this by calling 911. If you are involved in any accident with more than $1,000 in property damage or with death or injury and law enforcement does not respond to the scene, you or your insurer must report the accident to the California Department of Motor Vehicles within 10 days.
Most insurance companies require a police report to process your claim, or they will deny it. If you were unconscious after the accident or otherwise unable to interact with law enforcement, another vehicle occupant at the scene must make the report. If no one else is available, you can report the accident to the police after the fact and obtain a copy of the report by submitting a written request to the responding law enforcement agency, such as the California Highway Patrol or your local police department.
Late Accident Claim
Insurance companies impose strict deadlines on filing accident claims. Such a deadline may be as short as 30 days after the accident. Deadlines vary from one insurance contract to the next. If you miss the insurance company’s filing deadline, it could deny your claim. Our knowledgeable personal injury lawyers are familiar with the deadlines of all the major insurers in California, and we can ensure your claim is filed on time.
Even after you file your insurance claim, you’ll face additional deadlines. Under California’s personal injury statute of limitations, a car accident lawsuit must be filed within two years of the accident for injuries or within three years for property damage. If you wait beyond these deadlines to file a lawsuit, the court will likely dismiss your lawsuit. Thus, the carrier will have little motivation to offer a settlement, even if you filed your insurance claim on time. Some insurance companies intentionally drag their feet, hoping you will give up or wait until it’s too late to file a lawsuit.
Disputes Over Fault
If the insurance company cannot find other grounds to deny your claim, it may look for ways to deflect blame from the at-fault driver, starting with you. They often employ claims adjusters who strategically attempt to befriend you and make you feel comfortable enough to speak freely around them. No matter what the adjuster tells you, they are on the insurance company’s payroll and are not your friend.
The adjuster will try to get you to admit fault, apologize for the accident, or provide a recorded statement. To protect your claim, avoid talking to the other driver’s insurance company and allow an experienced car accident injury lawyer, such as our nationally recognized lawyers at Cutter Law, to deal with the insurance company for you.
If the insurance company cannot blame you for the accident, it may attempt to blame a third party, such as a government entity or car manufacturer. When you have our skilled and caring attorneys on your side, we will also look for fault with third parties, but this rarely removes all of the fault from the other driver.
Lack of Evidence
Insurance companies often deny a claim for lacking adequate proof that the other party was at fault or you were injured. The insurer may even perform a detailed forensic investigation. Therefore, you need a California car accident lawyer on your side to investigate for your benefit. We will do the hard work necessary to prove your claim. We’ll interview witnesses, look for video footage, and work with accident reconstructionists to build a strong case.
Disputes About Your Injuries and Medical Treatment
If the insurance company cannot find a technicality or assign you all the blame, it may deny you are injured. It may claim that your injuries are pre-existing and arose before the car accident or that you are lying about them. Seeking medical attention as soon as possible and completing the treatment your doctor prescribes is crucial. Your medical records are the most important evidence to verify your injuries and their severity. If you don’t seek medical treatment, the insurance company can claim that no treatment is necessary and deny your claim.
Bad Faith Insurance Denials
Some insurance companies are so determined to avoid paying compensation that they will resort to unethical and illegal tactics to deny your claim. They may use the following bad faith insurance tactics to avoid paying, with or without a formal denial:
- Unreasonable delays
- False accusations that you were drunk or uninsured
- False claims about statements you made
- Refusal to provide the reason for a denial
- Misrepresentation of the law
- Misrepresentation of the available coverage
- Threats and intimidation
Suspected Fraud
The insurance company may use a suspicion of fraud as grounds to deny a claim if it has reason to believe that you intentionally orchestrated the accident to collect a payment. However, without proof of such an allegation, an insurance company’s denial on this basis likely would not hold up in court. In some cases, an allegation of fraud arises from bad faith.
Intentional Misconduct
Section 533 of the California Insurance Code allows insurance companies to deny coverage when the policyholder’s harmful conduct is deliberate. California courts have held that for an incident to be classified as an accident, it must generally occur “suddenly and unexpectedly…without the foresight or expectation of the person acted upon or affected by the event.”
Thus, coverage for drunk driving accidents is a gray area. Although becoming intoxicated and driving a vehicle are intentional acts, drunk drivers generally do not intend to cause accidents. Insurance companies may deny coverage if either you or the other driver has been convicted of a DUI at the time of the accident. The law allows insurance companies to avoid liability for pain and suffering but not financial damages if you are convicted of a DUI in a crash caused by another driver.
However, if the other driver was intoxicated, you may still be entitled to recover all types of damages, including pain and suffering, from the insurance company. However, you still must prove that the drunk driver’s negligence caused the accident.
Administrative Error
Insurance companies are large bureaucracies, and unintentional mistakes can happen amid all the red tape. A denial could stem from a simple clerical error, computer error, or communication breakdown within the company.
What to Do If Your Insurance Claim Was Denied
An insurance denial doesn’t automatically mean your claim is invalid. Insurance companies are primarily interested in protecting their bottom line. Claim denials are not always correct. Whether your insurance company or the other driver’s insurance company denied your claim, you may be able to reverse the denial.
Step 1: Review the Denial Letter
You should receive a letter from the insurance company informing you your claim has been denied. The letter should provide the reasons for the denial. Read the letter carefully because it will inform you of what additional information you need to provide, if any, and what other actions you may need to take. The letter may also provide a deadline to take further action. Note this deadline.
Step 2: Look Over Your Policy
If the denial letter came from your own insurance company regarding an uninsured motorist claim, review your insurance policy’s declarations page to determine the following:
- The types of coverage you purchased
- Your policy limits
- Coverage exclusions
- Deadlines for filing a claim or appeal
Compare the information in your policy with the reasons for denial to determine whether the insurance company is honoring its contract. Your attorney will also scrutinize your policy and the letter.
Step 3: Submit an Appeal
You may be able to refute the insurance company’s grounds for denial with evidence. Using the insurance company’s reconsideration or appeal process, submit paperwork describing the reasons you believe the denial was incorrect with your supporting evidence, which may include the following:
- A forensic accident report
- Video footage
- A police report showing you were not at fault
- Medical records proving you were not under the influence
- Medical records documenting your injuries
- Signed and notarized witness statements
You may need assistance from accident reconstructionists, forensic experts, and private investigators to provide the needed evidence. We work with some of the most respected experts in the state and have the resources to gather the evidence you need. We can submit your appeal and communicate with the insurance company for you.
Step 4: File a Complaint with the California Department of Insurance
If you believe the insurance company improperly denied your claim, you can file a complaint with the California Department of Insurance. In some cases, the Department of Insurance can assist with reversing the denial. It also offers an Automobile Claims Mediation Program to help you resolve disputes with the insurance company about who is at fault for the accident and disputes related to the amount of damages.
The mediation program does not cover disputes over lack of coverage, time limits, policy provision interpretations, and bad faith allegations. Our well-versed car accident lawyers can assist you with any dispute with the insurance company. We can also determine whether the insurance company’s conduct was improper and file a complaint on your behalf.
Step 5: File a Claim under Your Uninsured Motorist Policy
If the at-fault party’s insurance refuses to pay your claim because the driver’s insurance has lapsed or the vehicle owner’s policy excluded the driver, you may be entitled to recover damages through your uninsured motorist insurance. Uninsured motorist insurance covers the same damages the at-fault driver’s insurance should have covered had they been insured.
If your insurance company pays the claim, it may seek reimbursement from the at-fault driver or their insurer if it determines they are responsible. This process is known as subrogation.
Step 6: Speak with an Experienced Car Accident Lawyer
If you have not already done so, contact a reputable car accident lawyer immediately. Ideally, this should be the first step, but even if you have already attempted to complete these steps on your own, it is not too late to involve one of our award-winning attorneys.
After reviewing your denial letter and investigating your case, our attorneys will immediately notify the insurance company and fight for full compensation. We know what to say and what not to say to protect your claim, and we refuse to quit until you receive the compensation you deserve.
Contact Cutter Law If Your Auto Insurance Company Denies Your Claim
As a family-owned and operated law firm, we understand how important your family is to you and how a car accident affects your whole family. We serve our clients compassionately and go out of our way to get to know them and their families. Our goal is for you to feel like part of our family. Every member of our firm will know your name, and we will go out of our way to keep you informed, check on your well-being, and connect you to local resources as needed.
We have over 130 years of combined experience and have recovered hundreds of millions in compensation for our clients. We never charge upfront fees, and you only pay if we win. Contact us now to schedule your free case evaluation.
Brooks has a long-established, respected reputation as a skilled trial attorney and a record of proven success.
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