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. Read on for the next steps following your denied claim.
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 denied.
Procedural Errors
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. Other errors 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.
Invalid Claim
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.
Examples of Bad Faith Tactics
- Wording the contract in such a way that it is indecipherable from the very beginning.
- The contract may also have absurd restrictions that you never even noticed until the insurance company pointed it out.
- An insurance representative may try to mislead you on the information in the contract in order to make sure a claim that should qualify actually does not.
- They could withhold important information about the contract in order to mislead you into thinking the contract works in a way it doesn’t.
- Attempting to wear you down through attrition, ensuring the investigation takes longer than is reasonable, hoping the claimant will give up.
- Ignoring you or dragging their heels when responding to you about your claim.
- Determining that the damages sustained were pre-existing, despite evidence to the contrary.
- Offering less than your claim is worth, in hopes of making some money in the end.
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.
Internal Appeal
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.
External Review
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.
You also will need to be able to demonstrate that the action was a bad faith tactic rather than the insurance company simply making a mistake. You also cannot use the fact that they simply disagree with you to call it a bad faith denial. If they cannot properly substantiate their position, this would likely not do them well if they were confronted.
Due to the propensity of bad faith tactics employed by insurance companies, several states have created laws specifically designed to combat these tactics. Make sure to look up your state laws to verify if your state has such a law in the books and if so, the various circumstances involved in the law.
In the event that you chose to pursue an external review, 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.
Your attorney can help give your case against your insurance agency merit. They should have experience dealing with bad faith tactics and will be well-prepared to navigate the situation. Additionally, your insurance provider will quickly learn they’re not going to have an easy time dealing with you and your attorney.
