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What can you do after your insurance company denies a claim?

| Jul 30, 2020 | First-Party Property Insurance Claims

Most of us rely on our insurance policies to protect us in a challenging situation. When an insurance company denies your claim, though, it can feel like you face those costs and challenges alone. After an insurance company denies your claim, is it possible to pursue the compensation you need to recover?

Why do insurance companies deny claims?

Insurance companies have a legal duty to act in good faith, respond to claims, investigate them and provide reasons for denial if they deny a claim. In many cases, insurance companies deny claims because the terms of the insurance policy do not cover the damage involved in the claim.

Some insurance companies, however, deny legitimate claims. When insurance companies fail to do their duty to policyholders, the insurance company is acting in bad faith. Bad faith actions by insurance companies can include:

  • Refusal to pay a claim that should be covered in a policy
  • Failure to communicate with policyholders about their claim or to explain the reasons for denial
  • Intentionally misrepresenting the details of an insurance policy’s coverage
  • Refusal to properly investigate a claim or unreasonable delays in investigation

If your insurance company acts in bad faith in dealing with your claim, you may be able to take legal action.

What can you do if your insurance company denied your claim in bad faith?

First and foremost, it is important to review the reason for their denial and compare it to your policy. Did you submit your claim within the required deadline? Do you believe that the damage in your claim should be covered in the terms of your policy?

Another important step to take is documenting the cost of repairs in your case. Receiving appropriate compensation often depends on having an accurate estimate of repairing the damage.

As much as possible, document the specifics of your claim. Make note of who you talked to, when you spoke to them and whether your insurance company missed your calls or ignored your contact.

If you believe that the insurance company has acted in bad faith, you may also want to speak to an attorney that has experience in bad faith insurance claims. They can help you navigate the terms of your policy and explore your legal options.

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