Insurance Claim Denied: What This Means & What You Need to Do
Having an insurance claim denied can be a difficult and confusing situation. If your insurance company has denied your claim based on credible proof, you likely don’t have much recourse. However, if you have carefully examined your insurance information and believe the insurance company denied your claim wrongly, then you likely have a valid reason to move forward with legal action. In this situation, your best bet is to consult a qualified and experienced attorney to help you navigate this complex area of the law.
Possible Reasons for Denial
Like any other business, insurance company’s existence depends on making more money than they expend. Unfortunately, this can lead to many valid claims being denied as insurance companies try to increase their profits.
Although Texas law provides certain avenues to ensure insurance companies act in good faith, there are grounds on which claims can be correctly rejected. One of the most common reasons for claim denial is not filing your claim on time. In Texas, time limits differ depending on the nature of the claim. For example, a claim for an automotive accident will differ from a workers’ compensation claim. While it is always best to file as soon as possible after the loss, it is advisable to consult with a qualified attorney to determine the actual deadlines
Another common reason for denial is if your insurance premiums are not paid on time. As noted above, insurance companies can be very particular about which claims they honor, and they are only required to honor those contracts that do not lapse. If an insurance company does not have a record of payment, they can deny your claim. Make sure to keep your premium paid up and keep receipts of all past payments made.
In the context of an injury claim, insurance companies may also deny your claim if they believe their insured is not responsible for your injuries. Although your injuries are valid and you are still due compensation, adjusters will look for any reason as to why they are not obligated to fulfill your claim. Too often people are denied support because the adjustor believes your injuries are not related to that accident. If you find yourself in this or any of the above situations, it’s best to contact a personal injury attorney that will help ensure you’re compensated.
Unfair Settlement Practices & Wrongful Denials
Although an insurance company may deny your claim if it is truly not valid, the state of Texas provides protection for those injured from insurance companies that try to engage in unfair or deceptive insurance business practices.
Under the Texas Insurance Code, insurance companies are prohibited from the following practices with respect to a claim by an insured:
- Knowingly misrepresent to claimant a material fact or policy provision relating to coverage at issue
- Fail to attempt in good faith to effectuate a prompt, fair, and equitable settlement of a claim with respect to which the insurer’s liability has become reasonably clear
- Fail to promptly provide to a policyholder a reasonable explanation of the basis in the policy for the insurer’s denial of a claim or offer of a compromise settlement of a claim
- Refuse to pay a claim without conducting a reasonable investigation with respect to the claim
However, keep in mind that this list is not exhaustive. It is important to consult an experienced attorney to help navigate these laws and ensure your insurance company isn’t involved in any unfair settlement practices or wrongful denials.
Unfortunately, insurance companies act like any other business and often do whatever is necessary to avoid paying your claim in order to preserve their profitability. As a result, people may suffer long-term injuries, or in some cases even die as a result. Although there can be valid reasons to deny a claim, if you have your claim denied, the best path forward is to consult a qualified and experienced attorney. An attorney can help you determine if your claim was wrongfully denied and advocate on your behalf to ensure you are fairly compensated.
Michael S Callahan is an attorney and founder of The Callahan Law Firm. He focuses his practice on representing individuals and families in personal injury cases involving motor vehicle and truck accidents, workplace accidents and defective products. With over 25 years of experience, he is dedicated to fighting on behalf of people whose lives have been forever altered by the negligence and carelessness of corporations and individuals. Originally trained as a mechanical engineer, Michael has been practicing law and fighting for justice for those who need it most since 1994. He is board-certified in Personal Injury Trial Law by the Texas Board of Legal Specialization and a member of various esteemed legal associations. Outside of work, Michael enjoys spending quality time with his family, outdoor activities, and continually striving to improve as a trial lawyer and human being.