What Happens If The Other Insurance Company Doesn’t Pay?

Getting into a car accident can be stressful enough. But when the other driver’s insurance company refuses to pay for your damages and expenses, it can quickly turn into a nightmare. Unfortunately, this scenario is all too common. Insurance companies are for-profit businesses, and some will try to avoid or minimize payouts when possible. So what recourse do you have if the other insurer denies or delays your claim? There are several steps you can take to get the compensation you deserve.

Reasons An Insurer Might Not Pay

There are a few common reasons an insurance company may reject your claim after an accident:

• Disputing fault – The insurer decides their policyholder was not actually at fault, contrary to the police report. They may try to blame you entirely or call it a no-fault accident.

• Disputing injuries or expenses – The insurer agrees their driver caused the crash but believes you are exaggerating your injuries or inflating the costs to repair your vehicle.

• Bad faith tactics – Some insurers simply deny or delay claims hoping injured parties will eventually give up. This practice is illegal in most states.

• Coverage limits – If the at-fault driver’s policy limits are exceeded by your damages, the insurer is only obligated to pay up to the cap. You would need to collect any excess from the driver personally.

No matter the reason, you have options if the other carrier refuses to pay what you are owed.

File A Complaint With The State Insurance Regulator

Every state has an insurance oversight agency that regulates insurer practices within that state. These regulators investigate complaints against insurance companies to identify bad faith behavior.

To file a complaint, contact your state insurance department directly. Have details of your accident and claim denial ready. The regulator will open a case file and contact the insurer to investigate your allegations.

If the insurer is found to be acting in bad faith or violating regulations, the regulator can force them to pay your claim and may levy fines or other disciplinary actions. This helps hold insurers accountable.

Hire An Attorney To Dispute The Denial

Consulting an experienced personal injury attorney is crucial any time an insurance company disputes a liability claim. An attorney has the expertise to build a strong case proving the other driver’s fault and your right to compensation.

Your lawyer can also negotiate aggressively with the insurer or file a lawsuit on your behalf if needed. Insurers often re-evaluate claims when a determined attorney gets involved, so hiring legal help is highly effective.

Submit A Demand Letter From Your Attorney

A demand letter from your attorney to the insurance company can prompt them to reconsider your claim. The letter should:

• Explain why their denial is unlawful and unfounded.

• Demand immediate payment of your damages.

• State you will pursue legal action if needed to recover what you are owed.

Receiving this puts the insurer on notice you will not stand for a wrongful denial. Demand letters add leverage in negotiations and sometimes resolve disputes quickly.

File For Arbitration Of The Claim

Every auto insurance policy has provisions for binding arbitration if a dispute arises over a claim. Arbitration provides a fast method to resolve conflicts without lengthy court proceedings.

An independent arbiter reviews documents and evidence from both sides then issues a final decision the insurer must abide by. If the arbiter rules in your favor, the insurer must pay your claim per their ruling.

File A Lawsuit Against The Insurer

If other resolution attempts fail, taking the insurance company to court is the next step. With an attorney’s assistance, you can sue for compensation, legal fees, and potentially punitive damages.

Lawsuits are time-consuming but may be the only way to force an unwilling insurer to pay if they refuse to arbitrate or ignore an arbitration decision against them. If you win your case in court, they will be legally compelled to pay.

Tips For Dealing With A Claim Denial

Follow these tips to strengthen your position if an insurer denies your liability claim:

• Report the accident promptly to the insurer and police, following all required procedures. Failing to properly report can jeopardize your claim.

• Seek medical treatment right away, even for minor injuries. Delaying care provides insurers reason to dispute your injuries were accident-related.

• Save documentation like accident photos, police reports, medical records, and repair estimates. This evidence will be key to proving your case.

• Avoid settlements or signing releases until your claim is resolved. This compromises your ability to seek additional compensation later.

• Be wary of recorded statements to insurers which they may use against you. Decline to provide a statement or consult an attorney first.

• Keep detailed records of all communications with the insurer. Document names, dates, and details of conversations and correspondence.

• Mitigate losses by following medical advice to recover fully and allowing your vehicle to be repaired promptly.

Alternate Routes To Recovery If The Insurer Refuses To Pay

If you exhaust all options against the insurer in vain, there may still be alternatives to recover your losses:

• File a claim with your own insurer if you have applicable coverage, such as uninsured motorist coverage. You pay premiums so your insurer will pay when others breach their duty.

• File a claim with your health insurer or employer benefits plan which may subrogate and go after the liable driver’s insurer for reimbursement.

• Claim against your credit card if you paid any accident-related expenses with a card that offers collision or rental coverage benefits.

• Locate assets and file suit directly against the at-fault driver, such as garnishing their wages or placing liens on their personal property.

Don’t Give Up If An Insurer Denies Your Claim

The aftermath of an auto accident is difficult enough without an insurance company refusing to pay for your damages and bills. Don’t hesitate to be persistent and leverage every option at your disposal. With tenacity and skilled legal help on your side, you can fight until you receive the just compensation you deserve.