Receiving a denied insurance claim can be frustrating, stressful, and financially overwhelming. Whether it’s a claim for property damage, medical expenses, or business losses, an insurance denial can leave policyholders feeling powerless. However, a denied claim is not always the final decision—you have options to challenge the decision and potentially recover the compensation you deserve.
In this guide, we’ll explore why insurance claims get denied, what steps to take after a denial, and how an experienced insurance attorney can help you fight back.
Common Reasons Insurance Claims Are Denied
Before taking action, it’s important to understand why your claim may have been denied. Insurance companies often reject claims due to:
1. Policy Exclusions
Many policies contain exclusions that limit coverage for certain situations. For example, flood damage is often excluded from standard homeowner’s policies, requiring separate flood insurance.
✅ Tip: Carefully review your policy’s exclusions before filing a claim. If the denial is based on an exclusion, consult an insurance attorney to determine if it was wrongly applied.
2. Missed Deadlines
Most insurance policies have strict deadlines for filing claims and submitting required documentation. If you miss these deadlines, your claim could be automatically denied.
✅ Tip: Always submit claims as soon as possible and keep track of all important deadlines. If you missed a deadline due to exceptional circumstances, an attorney may be able to argue for an extension.
3. Insufficient Documentation
Insurance companies require clear, detailed evidence to process claims. If your claim lacks the necessary documentation—such as photos, receipts, or medical reports—it may be denied.
✅ Tip: Always provide thorough documentation when filing a claim. If your claim was denied for insufficient proof, gather additional evidence and resubmit it.
4. Alleged Misrepresentation or Errors
If an insurance company believes you provided inaccurate information on your policy application or claim, they may deny coverage. Even minor errors or unintentional omissions can be used against you.
✅ Tip: Double-check all documents before submitting them. If your claim was denied due to a misunderstanding, provide corrected or clarified information immediately.
5. The Insurance Company Acts in Bad Faith
Unfortunately, some insurers unfairly deny valid claims to protect their bottom line. Signs of bad faith insurance practices include:
- Unreasonable delays in processing your claim
- Denying your claim without proper investigation
- Offering an unfairly low settlement
- Failing to provide a clear reason for denial
✅ Tip: If you suspect bad faith, consult an insurance attorney immediately. You may be entitled to compensation beyond your claim amount if your insurer is found to have acted unfairly.
Steps to Take After a Denied Insurance Claim
If your claim has been denied, don’t give up just yet. Follow these steps to fight back and improve your chances of getting the coverage you deserve.
1. Review Your Denial Letter
The first step is to carefully read the denial letter from your insurance company. It should explain:
✔️ The specific reason for denial
✔️ Any policy exclusions that apply
✔️ The next steps for appealing the decision
📌 Pro Tip: If the explanation is unclear or vague, request further clarification in writing. Insurers are legally required to provide a clear reason for denying a claim.
2. Gather Additional Evidence
If your claim was denied due to lack of evidence, strengthen your case with additional documentation, such as:
✔️ Photos & videos – Document damage or injuries with clear, time-stamped visuals.
✔️ Receipts & invoices – Provide proof of expenses related to repairs, medical treatments, or property loss.
✔️ Expert reports – Get professional evaluations from contractors, medical professionals, or forensic experts to support your claim.
✔️ Eyewitness statements – Written statements from witnesses can provide credibility.
📌 Pro Tip: Keep a detailed record of all communication with your insurance company, including emails, phone calls, and letters.
3. File an Appeal
Most insurance policies allow policyholders to appeal denied claims. Follow the insurer’s appeals process carefully and submit any additional documentation that supports your case.
Key steps for a strong appeal:
✔️ Submit a written appeal explaining why your claim should be approved.
✔️ Provide new evidence that directly addresses the reason for denial.
✔️ Cite your policy language to prove your claim is valid under the terms of your coverage.
📌 Pro Tip: Be sure to submit your appeal before the deadline—insurers often have strict time limits for appeals.
4. Consult an Insurance Attorney
If your claim is still denied after an appeal, or if you suspect bad faith insurance practices, it’s time to consult an experienced insurance lawyer.
💼 How an Insurance Attorney Can Help:
✔️ Review your policy to ensure your insurer is following the law.
✔️ Negotiate with the insurance company to reach a fair settlement.
✔️ File a lawsuit if necessary to force the insurer to pay what you’re owed.
✔️ Prove bad faith practices and seek additional compensation if your insurer acted unfairly.
📌 Pro Tip: Many insurance attorneys work on a contingency fee basis, meaning you only pay if they win your case—so there’s no risk in seeking legal help.
When to Take Legal Action Against an Insurance Company
If your insurance company refuses to pay a valid claim, delays payment for an unreasonable amount of time, or acts in bad faith, you may have legal grounds to sue.
Signs You May Need to File a Lawsuit:
❌ Repeated delays in processing your claim
❌ Unfair denial of a clearly covered claim
❌ Misrepresentation of your policy terms
❌ The insurer pressures you to accept a lowball settlement
❌ Lack of communication or failure to provide a valid reason for denial
In some cases, a lawsuit may allow you to recover additional damages beyond your original claim amount, including legal fees and punitive damages for bad faith conduct.
📌 Pro Tip: Before suing, let an insurance attorney send a demand letter to your insurer. Many disputes are resolved without court intervention once legal action is threatened.
Final Thoughts: Don’t Accept an Insurance Denial Without a Fight
A denied insurance claim isn’t the end of the road. By understanding your policy, gathering strong evidence, and seeking legal guidance when necessary, you can fight back against wrongful denials and secure the compensation you deserve.
At SJJ Law, we help policyholders challenge unfair denials, negotiate settlements, and take legal action against insurers acting in bad faith.