Car Insurance Disputes
Car insurance disputes are common because insurance coverage can be complex. Deductibles, covered risks, and accident scenarios vary widely, which often generates disputed figures.
Armed with the right knowledge, you may face fewer obstacles when you make a claim, though disputes can always occur. Keep reading to learn about how disputes are handled and what to do if you aren't satisfied.
Best Practices for Preventing Car Insurance Disputes
Most complaints are handled by state agencies and many cases eventually go to arbitration or trial when settlements can't be reached. In other words, disputes can quickly become an ordeal.
You can prevent disputes over your car insurance by taking the time to fully understand what your policy covers AND arranging for additional auto insurance to cover any gaps in your coverage.
You'll have the following rights regardless of the state that you reside in:
- Insurers cannot misrepresent your coverage and obligations.
- Companies can't negotiate to settle one part of a claim by forcing you to accept denial of coverage in another area of the policy.
- Bureaucratic red tape in the form of excessive forms can't be used to discourage filing a claim.
- Insurance companies can't routinely appeal all decisions that go against them unless there's strong evidence to prove the decision was unfair.
- Claims must be acknowledged and processed quickly.
- If delays are necessary for settling your claim, auto insurance companies must explain why the delay is occurring.
If you believe your rights have been violated and your insurance carrier does not make an effort to remedy the situation, it may be time to file a dispute.
Initiating a Dispute
Despite the efforts of both parties to agree on terms, disputes are possible. If you don't agree, you should first contact your agent or broker to see if they can get resolve the dispute for you.
If this doesn't work, write a letter to your car insurance provider explaining why you disagree with its decision. Send a copy to your agent, any party involved in the dispute, AND your state agency that regulates insurance. If no progress is made, you can try arbitration, file a complaint, or take other legal action to get a favorable decision.
Arbitration is a common way of settling auto insurance disputes without having to go to court. You can take part in arbitration with OR without a lawyer. It is (in most cases) binding, and the decision can be sent to courts in any jurisdiction for enforcement.
Pursuing Car Insurance Disputes in Court
If you can't resolve a dispute by any of the methods suggested above, and you're certain you've been cheated AND have the evidence to prove it, you can sue in small claims court.
Each state has its own auto insurance regulations, but we'll use California as an example. Natural U.S. citizens can sue CA insurance companies for amounts up to $10,000. Other states have similar regulations, so it's important to research the guidelines specific to your state of residence.
Small claims court isn't your only alternative if you can't resolve the dispute. If the amount in question is significantly higher than state thresholds for small claims, you can hire an attorney and sue the insurance company in civil court.
Common Reasons Why Car Insurance Claims Are Denied
Insurance companies often deny claims based on common insurance practices and the legal terms of your policy.
Your claim might be denied OR investigated if you:
- Have made fraudulent claims in the past.
- File too many claims.
- File claims for coverage you didn't buy.
- File claims for excluded areas of coverage.
- Fail to pay your insurance premiums on time.
- Were driving under the influence when an incident occurred.
- File claims for accidents involving drivers not named in your policy.
- Make claims that exceed coverage limits.
- Are fully or partially at fault for the accident.
It's important to fight for AND know your rights when it comes to filing auto insurance claims. Consult with your agent or broker if something seems off.