What Happens If Your Insurance Claim is Denied?

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Filing an insurance claim is not the easiest or most enjoyable thing that you can do, and there are additional complications that may manifest. One thing that all too many people have had to face when filing an insurance claim is when their insurance provider flat out denies the claim. This may seem like the end of the road for many, but in truth, there are a lot of options that can be taken to try to get the claim denial overturned, which will be discussed below.

Why Was My Insurance Claim Denied?

The first thing you should do if your insurance claim is denied is to figure out exactly why it was. One of the most common reasons for denial is actually a group of reasons that can be referred to as procedural errors. Namely, for some reason or another, when you filed your insurance claim, you did something wrong that caused them to deny it by default. In this case, the best thing to do is to try to correct your error and resubmit it as soon as possible. Make sure that you are extra positive that you got every single detail right in your claim, as having to send the claim in more than once is not a good look; more than twice is especially poor. Some of the procedural errors are a lot easier to understand; for instance, one reason a claim is often denied is simply that you lacked a necessary piece of information. So long as that information is readily available to you, it is a pretty easy fix, all things considered. Some are a lot more complex, and if you feel you need help resubmitting it, consider consulting an expert to ensure things are done correctly this time.

On the other hand, sometimes a denial may come about because the insurance company has deemed your claim invalid, or argued that you have done something that has you at odds with the contract you signed with the company. This can certainly have merit, but all too often, you may find that the denial comes as a result of the insurance company looking for any excuse — even if they have to invent one — to avoid having to fulfill their obligations and pay you the compensation that you are owed. This is referred to as a bad faith tactic, one employed to avoid their contractual obligations in general. It should come as no surprise that an insurance company may do such an underhanded thing; after all, they are a business first and foremost, and too many businesses have seen that denying claims makes more money than fulfilling them. Insurance companies are often depicted negatively in fiction for a very good reason.

What Are The Next Steps If Your Insurance Claim is Denied?

Once you have actually determined why your insurance claim was denied, the next step you need to take is to appeal the decision, though it is not as simple as appealing or not. There are two kinds of appeals that can be done: an internal appeal and an external review. The internal appeal is done through the insurance company that denied your claim, so you will have to try to make an argument that would compel the insurer to change their minds on their previous decision. This kind of appeal is going to be a more worthwhile thing to try in the event that you believe that your insurance company was acting in good faith when they denied your insurance claim.

However, if you think that a bad faith tactic was employed as part of your denial, going with an external review may be your best bet. This process involves an uninvolved third party making the final decision, leaving the insurance company out of that part of things. Not only will they find your claim valid if there is merit to it, but they may also find evidence to suggest that one or more bad faith tactics were employed. There are certain circumstances that need to be fulfilled in order to get started on an external review. For example, in the case of medical insurance, a difference of opinion may make the claim eligible for one. Your insurance company may disagree with a certain medical judgment or denies a claim because of the involvement of a treatment considered by the company as experimental. They may also deny based on an allegation that you gave false or incomplete information as part of your filing.

In the event that this is the case, you should also consider employing the services of a bad faith attorney whose specialties can help you file a lawsuit against the insurance company for their bad behavior. Some states have laws specifically designed to combat these kinds of tactics. As such, you should be sure to look up your state’s respective laws relating to this. This both verified whether your state has one; if it does exist, it also helps verify the various circumstances of the law. Your bad faith attorney can do more than you may realize to help give your case against your insurance agency merit. After all, a professional with experience dealing with bad faith tactics employed by insurance companies are going to have a better job navigating the situation, and indeed, are a lot more likely to convey to an insurance provider who is acting in bad faith that they are not going to have an easy time dealing with you and your attorney.

Doug Terry

In 1999, Doug became one of the founding partners at an Oklahoma City law firm. Doug’s practice evolved away from representing insurance companies, and he began representing individuals and businesses who had been treated unfairly by their insurance companies. This type of practice became his passion. Doug found that standing up for normal people, like those he had grown up around in Oklahoma, who had been taken advantage of by huge insurance companies was what he was meant to do.

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