Misfortunes such as death, injuries or damage to property are never easy to deal with. Insurance can be a great relief at a time like this. However, it can therefore be disheartening to find yourself in a battle with your insurance provider and the denial of your claim can be overwhelming.
The good news is that you don’t have to take the denial lying down. There are laws that are specifically designed to protect consumers. As more consumers learn about their rights, more policy holders are suing their insurers for denying their claims.
Why your claim was denied
There are various reasons insurance providers may choose to deny insurance claims. These include:
- An error in your application: Insurance providers may deny your claim if you misrepresent your situation or yourself in your application.
- An error in your claim: It is important to understand the terms of your policy and ensure that you file your claim in accordance with these terms. A simple error such as not notifying your insurance provider within a specified period could cause your claim to be denied.
- You’re not covered: Ensure that you read the fine print in your policy. Understand the exclusions and what is covered under the policy. Your claim may not be covered by the policy.
- Fraud: Your insurance provider may deny your claim if they have reason to believe that you have committed insurance fraud e.g. exaggerating the amount for your claim.
- Bad faith: Insurance providers may provide various excuses for not paying a claim. In reality, some of them simply don’t want to pay the claim.
When to Sue
Insurers are contractually obligated to pay their policy holders when they make legitimate claims. They are required to act in good faith and honor the terms in their contract. Policy holders can sue insurance providers if:
- The insurance provider failed or delayed to investigate their claim
- Refused their claim for reasons that are unclear
- Denied or failed to approve the claim within the specified period or a reasonable timeframe
- Failed to provide an explanation for the denial of the claim
- Failed to defend the policy holder in a liability lawsuit that is covered under their policy
- Denied the claim based on misstatement of the application
If you believe your insurance provider has denied your claim unfairly, you may be able to take legal action and sue your insurance company for breach of contract or bad faith. An insurance attorney can help you build your case and represent you.