Insurance Claim Denials – Know Your Rights

Insurance carriers typically deny claims in a letter stating that the claim will not be paid.

Additionally, if the insurance carrier agrees to pay only a portion of your claim, the insurance carrier has denied your claim as to the remaining part of your loss.

Or, even if the insurance carrier has not expressly stated it would deny the claim, the insurance carrier may have denied your claim by failing to promptly investigate and pay the claim.

Evaluating the denial of an insurance claim involves answering this question: did the insurance company honor its written promise to provide insurance protection in light of the circumstances of the claim?

Insurance policies are contracts expressing promises. Insurance carriers must honor their written promises in those insurance contracts. Carriers are not permitted to adopt strained interpretations of their written promises to avoid paying insurance benefits.

Also, if the terms of their written promises are unclear or inconspicuous, insurance carriers are prohibited from adopting the interpretation that “tilts” in its favor of not paying the claim.

Additionally, insurance carriers must perform a reasonable investigation of the facts of the claim. When denying a claim, a carrier is supposed to advise its policyholder of the factual basis underlying its decision to not pay insurance benefits.

First, you should identify the precise language upon which the insurance carrier is relying to deny your claim.

All insurance policies contain a statement—known as an insuring agreement—that describe the family of risks generally within the scope of that policy’s insurance coverage. Insurance policies also contain exclusion clauses that “take away” coverage for certain risks within the scope of the insuring agreement.

In denying insurance claims in a disclaimer letter, insurance carriers are supposed to quote all relevant language in the insurance policy that supports the decision to not pay insurance benefits. If you have a complete copy of your insurance policy, you can refer to its provisions to identify the contractual promises and other terms.

Second, you should identify the specific facts upon which the insurance carrier is relying to deny your claim. The facts underlying a carrier’s decision should be set forth in the disclaimer letter. A carrier cannot rely upon an inadequate investigation to justify a denial of benefits if the readily accessible facts would have warranted payment of the claim.

If you cannot identify the policy language and relevant facts from the insurance carrier’s disclaimer letter, or if the letter is simply unclear, you may have a basis to challenge the carrier’s decision to not pay your claim.

Do not assume the insurance carrier is placing your interests over its interests.

While most insurance carriers pay covered claims promptly, many claims are improperly denied or unreasonably delayed. The claims department of many insurance carriers are understaffed and undertrained. Also, claims handling practices often evolve over time in claims department with ultimate effect of treating policyholders unfairly.

Most insurance carriers are for-profit companies, and by not paying covered claims, insurance carriers increase their profits at the expense of policyholders who paid a premium for insurance protection.

In most instances you will not need a lawyer.

The vast majority of insurance disclaimers are based upon legitimate reasons.

If the insurance carrier has made a mistake, this may be apparent in its disclaimer letter. If not, a simple phone call by you to the carrier’s representative may clear up the situation.

In some instances, however, you may need an experienced attorney. Many claims are factually or legally complex and involve a significant amount of money or other loss. An experienced attorney can assist in identifying mistakes by insurance carriers.

Moreover, because the laws governing insurance favor policyholders, an experienced insurance lawyer can often assist in challenging an insurance carrier’s decision even in situations that may seem hopeless.

If you believe an insurance carrier has incorrectly denied a claim, you should contact an experienced insurance lawyer to perform an initial review of the insurance policy, any other information about the claim for insurance, and the insurance carrier’s written denial of coverage.

If an initial review reveals that your claim may have been wrongfully denied, an experienced insurance lawyer will be able to provide you with a range of options along with a discussion of the pros, cons, fees, expenses, and timing considerations of each option.

Working with your attorney, you can formulate a plan of action consistent with your primary objectives and budget in light of all relevant circumstances.

The firm’s founder, Jeff Bolender, has successfully practiced insurance law and insurance litigation for the past twenty years. He has litigated insurance and bad faith issues in multiple jurisdictions. Mr. Bolender, who worked for insurance carriers for many years, now works exclusively for policyholders in their disputes against insurance carriers.

Mr. Bolender is able to help most policyholder clients with an initial coverage review and consultation. This initial consultation involves a one-hour meeting with the client. It also includes a review of documentation and any policy documents, a preliminary legal analysis of the insurance carrier’s claim denial, and an outline of the client’s options in resolving the insurance dispute.

In providing this initial coverage review, the Bolender Law Firm endeavors to give our policyholder clients a broad view of their dispute within the context of the various options available including each option’s likelihood of success, financial and emotional costs, and other considerations.