What Happens If Your Insurance Claim Is Denied?

You can anticipate that insurance will cover property damage after a car accident. Without insurance, medical expenses following a catastrophic event such as a motorcycle accident or a pedestrian collision can be expensive. It is reassuring to know that insurance will cover your losses if you or a friend are injured on your property.

Common Reasons for Denied Claims

What the policy will pay for, known as covered perils, and what it will not pay for, known as exclusions or limitations, are specified in insurance policies. Included perils in a homeowner’s insurance policy may include, for example, theft. When your insurance claim is denied, the insurance company must provide an explanation.

If the insurer determines that the claimed damage was not caused by a covered peril, the claim may be denied. Policy language can be difficult to comprehend and interpret. A similar determination may be subject to appeal under the terms of the insurance policy.

Liability refers to a person or entity’s responsibility or fault for something. Personal Injury Protection is the name of the no-fault insurance that New York requires all motorists to carry (PIP). PIP covers certain expenses incurred by drivers, passengers, and pedestrians who are struck by motor vehicles, regardless of fault.

When damages exceed the limits of the PIP policy, liability insurance kicks in. When a driver is at fault, their liability insurance covers the damages they cause to other people or property. If there is uncertainty regarding who is at fault for the damages, the insurance company may deny the claim.

The insurance company is obligated to pay when a covered peril occurs. Typically, an insurance policy includes a deductible, which is the amount the insured must pay out-of-pocket toward expenses. Claims for damages of less than $500 may be denied for policies with deductibles of $500.

Most insurance policies contain a list of occurrences that are not covered, referred to as exclusions. Frequently, homeowners’ insurance excludes flooding. Sometimes, automobile insurance excludes damages caused by a driver under the influence of alcohol or drugs. Occasionally, insured parties contest the insurer’s interpretation of policy exclusions.

There are additional reasons your insurance claim could be denied. A claim is denied if an insurance policy has expired. Your policy lapses if you fail to pay your premium. This typically occurs when an individual whose premiums are automatically deducted receives a new debit card number.

Additionally, insurance claims can be denied based on policy requirements. Numerous policies stipulate that the insured must notify the insurance company within a certain amount of time following a potential loss. Your claim’s validity may be questioned if you fail to notify the company of a loss.

Bad Faith & Wrongful Denials

If the insurance company refuses to provide the reason for the denial or if the reason given is illogical, they may be acting in bad faith.

Possible acts of bad faith include:

  • Lacking a sufficient reason for denying a claim
  • Falsely representing coverage at the time of sale
  • Offering intentionally insultingly low settlement offers
  • Denying claims investigation
  • Not responding to your correspondence or unreasonably delaying responses

If your insurance claim is denied, you might be tempted to give up. Nonetheless, failure to pursue your claim could leave you with a substantial financial burden. If an insurer denies your claim, you have several options.


Most, if not all, insurance policies include appeals procedures for denied claims. Although you do not need an attorney to file an appeal, you may have greater success if you do.

Potential Legal Action

Whether your case involves a slip-and-fall accident at the grocery store or you hit a bicyclist with your door, if you have suffered a covered loss and have been exposed to a covered peril, the responsible insurance company should pay your claim. If the insurance company denied your claim, a personal injury attorney can help you understand your legal rights under the terms of the policy.

Contact Our Personal Injury Law Firm

Contact Abrams Law Group for a free consultation if you’ve been hurt in an accident and require legal assistance.

Abrams Law Group
104-70 Queens Boulevard, Suite 502
Forest Hills, NY 11375
(718) 997-9797

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