Man is frustrated during insurance claim process

What to Do if Insurance Has Not Paid My Claim?

Arnett & Arnett, PC  July 5, 2024

Imagine this: You have been paying your premiums on time every month for years, and now the time has come for you to file a claim and see that all that money you paid to your insurer over the years wasn’t for nothing. So, you file a claim for coverage and, much to your surprise, your claim gets denied.  

It can be incredibly stressful and frustrating to hear that the insurance company won’t pay your claim, but that doesn’t mean you should just accept the denial and watch your life spiral out of control. At Arnett & Arnett, PC, we know how you feel right now. In the past 30 years, countless people who came to our office were in your shoes and we have helped them get out of this seemingly hopeless situation.

Our insurance bad faith attorneys in Chandler, Arizona, can review your particular situation and explain your options when the insurance company refuses to pay.  

Reasons Why an Insurance Company Won’t Pay Your Claim

Every insurance advertisement you see on TV may try to convince you that the insurer is on your side. “If something happens, we will be there for you!” they might say. But don’t be mistaken: Insurance companies are profit-driven businesses, and they only care about maximizing their gains. Unfortunately, their business model is based on paying claimants as little money as possible but just enough to be legally acceptable.  

When an insurance company refuses to pay your claim, you need to understand the reasons for the denial. Some common reasons for claim denials include:  

  • Incomplete or incorrect information. Insurance companies require detailed documentation to process claims. That’s why gathering documentation is one of the most important steps to take when filing a claim. Missing documents, providing inaccurate details, or having discrepancies in your claim can lead to an outright denial. Always double-check your paperwork before submission to avoid this pitfall.  

  • Policy exclusions. Insurance policies often come with a list of exclusions, specifying what is not covered. A common example is a wear and tear exclusion in property insurance claims. If your claim falls under an excluded category, the insurance company is within its rights to deny it. Reviewing your policy thoroughly can help you understand what is and isn't covered, reducing the chances of denial due to exclusions.  

  • Late filing. Most insurance policies have a specific window within which you must file your claim. If you miss this deadline, your claim could be denied regardless of its validity. Make it a priority to submit your claim as soon as possible after an incident to avoid complications related to late filing. 

  • Insufficient coverage. Sometimes, the value of a claim may exceed policy limits. In such cases, the insurance company will only pay up to the maximum limit, and any amount beyond that will be denied. It's essential to know your policy limits and ensure they are sufficient to cover potential claims. 

  • Perceived fraud. Insurance companies are vigilant about fraudulent claims. In fact, they may even use surveillance to deny your claim. If they suspect any foul play or inconsistencies in your claim, they may reject it outright. This can happen even if the suspicion is unfounded. Providing complete and accurate information, along with supporting evidence, can help mitigate this risk.  

The letter of denial should specify the reason why the insurance company won’t pay your claim, call the insurance company's claims processing department directly.  

Appealing the Denial of Your Claim

Before you begin the appeal process, it's crucial to understand why your claim was denied. The denial letter should outline the specific reasons. Reviewing this information will help you address the issues effectively in your appeal. If the reasons are unclear, don't hesitate to contact your insurance company for clarification. 

Once you understand the reasons for denial, gather all relevant documents that support your claim. This could include medical records, repair estimates, photographs, or witness statements. The more evidence you provide, the stronger your appeal will be. Make sure all information is accurate and complete to avoid further complications.  

Next, you will need to prepare an appeal. Start by addressing the specific reasons for denial mentioned in the denial letter. Use the supporting documentation you've gathered to counter these points. Be clear, concise, and respectful in your tone. State your case logically and provide all necessary details to support your claim. Consider hiring an attorney (if you aren’t represented at this point) to help you with this step.  

Suing the Insurance Company for Acting in Bad Faith

All insurance companies have a duty of good faith, which means they must deal fairly with their insured.

Bad faith occurs when an insurance company doesn't uphold its end of the policy agreement. Common examples of insurance bad faith tactics include unreasonable delays, inadequate investigations, or unjustified denials. Document any instances where you believe the insurance company acted in bad faith to strengthen your legal action against the insurer.  

An attorney can assist in gathering all available evidence and building a strong legal argument to sue the insurance company for acting in bad faith. If all other avenues have been exhausted, filing a lawsuit might be the only option to make the insurer pay after a denial of your claim.

Your attorney will guide you through this process, from filing the complaint to representing you in court. Keep in mind that lawsuits can be time-consuming and costly, but if you have a strong case, your lawsuit could result in a favorable outcome, so it’s worth the effort.  

If Your Insurance Company Doesn’t Pay, We Can Make It Pay

Dealing with an uncooperative insurance company when your life has been put on hold and you’re struggling financially is the last thing you want. We get it. But don’t let them off the hook so easily. Don’t just accept the denial of your claim. You may still have a chance to overturn the denial and receive the coverage to which you are entitled.

And our attorneys at Arnett & Arnett, PC, are here to help you make that happen. From our office in Gilbert, Arizona, we serve clients throughout the state, including Chandler, Flagstaff, Tucson, and Phoenix. Give us a call today to set up a free consultation and get started.