In states that follow fault-based systems for handling car accident insurance claims, an at-fault driver’s insurance policy will generally cover the damages from an accident up to the limits of the policy. The claimant must prove the at-fault driver’s liability for the accident and then send a demand letter to the insurance carrier requesting a settlement. Insurance companies have no obligation to respond to demands that exceed a policy’s limits, but in some cases, an insurer may refuse to accept liability for a claim. It’s important for injured claimants to know how to handle such a situation.
When Can an Insurance Company Refuse Liability?
If you submit a claim to an insurance company but your medical records do not indicate any treatment after the accident or any sign of your claimed injuries, then an insurance company may have solid grounds for denying your claim. If the accident was avoidable or you somehow contributed to it, the insurance company could use these factors as grounds for refusing liability. In any case, where an insurer denies a claim because the insurer believes the claimant is partially to blame for causing the accident, the claimant should hire a car crash attorney as soon as possible.
The limits to the policy are another important factor. For example, if you sustain $250,000 in damages from your accident but the at-fault driver’s insurance only covers up to $100,000, you cannot claim more than $100,000. The insurance company doesn’t even have an obligation to respond to claims that exceed policy limits, so the claimant would need to pursue civil action to recover the rest of his or her losses.
The claimant may need additional information or evidence to prove the validity of his or her claim, but some insurance adjusters act in bad faith to intimidate claimants or convince them they have no grounds for their claims. There are many types of insurance bad faith and all claimants and policyholders should know how to identify them.
What is Insurance Bad Faith?
If an insurance company refuses to accept liability for an accident claim in bad faith, an experienced attorney can help you handle the situation and reach a more favorable result. In many cases, simply drafting a letter claiming bad faith is enough to spur a more agreeable conversation with a claims adjuster. Most insurance companies would prefer to pay out on claims rather than invest in lengthy and expensive litigation, and hiring an attorney makes your claim stronger.
Insurance bad faith can include:
- Refusing to accept liability for a legitimate claim that falls within the terms of the policy
- Failing to address or process a claim in a reasonable time
- Failure to adopt clear policies for investigating and processing claims
- Failing to settle an appropriate claim in a reasonable time
- Failing to provide a justifiable reason for denying a claim
Resolving a Denied Claim or Bad Faith Failure to Settle
Pursuing a bad faith claim against an insurance company falls within a very specialized area of the law and requires an experienced bad faith insurance attorney. If the initial claim of bad faith is not enough to encourage a settlement from an insurer, an attorney can help the claimant strengthen his or her claim with additional evidence or pursue a bad faith lawsuit against the insurer. Your attorney may also suggest pursuing a formal appeal to convince the insurer to cooperate without resorting to litigation.
Ultimately, there are many reasons an insurer may refuse to accept liability for an auto accident claim, and not all of them may be legitimate. While the average person may be able to successfully navigate straightforward insurance claims without professional legal representation, a bad faith case would be an extraordinary situation that requires an attorney.