What if the Claims Adjuster Denies Coverage?

top-down image of a person going over insurance documents

It is a sad fact that insurance companies of all types are only able to maintain profitability by taking in more money in premiums than they spend in claims. Because of this, many claims are denied—regardless of whether that denial of coverage is legitimate. When you file your initial claim to an insurance company, it may promptly come back with the adjuster contending that the policy does not cover the accident you experienced, or the injuries it caused. Common reasons cited include that the policy has lapsed, that the nature or location of the accident was not covered, that the person who caused the accident is not covered, or that you do not qualify to make a third-party claim under your state’s no-fault law. It is important to keep in mind, however, that this does not end settlement negotiations; it simply adds an element to the negotiations.

Some adjusters will attempt to claim that “the lawyers” have said that there is no coverage; some will even provide you with a “lawyer letter” from a company attorney attesting to that “fact.” Do not be impressed by this tactic; the opinion of a company lawyer is no more binding than anyone else’s opinion, ultimately. Whether or not your personal injury is covered depends on the terms of the policy, which can often be read many ways, depending on the facts. One important legal precedent states that ambiguities in a contract—including insurance policies—are resolved in favor of the one signing; in this case, in favor of coverage.

If you have been informed that the company will not cover your personal injury incident, ask the adjuster to give you a written explanation of the company’s reasons for claiming that there is no coverage, including references to the specific policy provisions that limit coverage. If the adjuster is completely bluffing, this will often be revealed by this gambit. If the adjuster does not agree to give you a specific written explanation, your next step would be to write a letter to the adjuster confirming the conversation and the denial of coverage, including the adjuster’s refusal to explain in writing. This might be enough pressure for the adjustor to give you some information; if you eventually go to the insurance commission or file a lawsuit, the presence of this kind of letter in the claim would demonstrate a lack of cooperation, and potentially bad faith.

If the adjuster does provide you with a detailed explanation with references to the parts of the policy that pertain to the decision, your negotiations are still not necessarily over. It may be a good idea to contact an experienced personal injury attorney at this point, so that different pressure can be brought to bear on the insurance company, and the true validity of the opinion can be tested. A knowledgeable attorney can also advise as to whether there are any other insurance that you could file claims with more successfully. Every scenario is different, and personal injury claims can be time consuming and frustrating; professional, dedicated help can make all the difference.

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