Accidents happen. In the best-case scenario, your car insurance policy covers related costs and you can begin the recovery process. This might include submitting a claim with your car insurance company, sharing the incident details, the other party’s information and necessary police and eyewitness reports.

Once your insurance company examines fault, repairs and coverage, they will inform you of their decision — a check for repairs, rental car coverage or funds for a new vehicle. But what do you do if your insurance company denies your claim?

Learn why an insurance agency might deny a claim, how to appeal a decision and what insurance policy information you need to understand before an accident occurs.

Key Highlights
  • Car insurance companies can deny accident claims. Common reasons include coverage discrepancies, being found at fault for an accident and falsified information.
  • Policyholders can contact their insurance agency after a denial to seek resolution options. 
  • After a decision, policyholders can appeal the compensation amount or judgment by submitting evidence that supports their request. An attorney or arbitrator can also be consulted. 
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Written by:
Katrina Raenell
Contributing Researcher
Katrina Raenell is a writer, editor and educator with 20 years of experience in content and communications for international organizations, nonprofits and start-ups. In her previous roles, she was a communications manager for study abroad, content project manager for higher education and finance websites, reported on arts and culture, and was a managing editor for an online health and wellness publication.
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Reviewed by:
Laura Longero
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Executive Editor
Laura is an award-winning editor with experience in content and communications covering auto insurance and personal finance. She has written for several media outlets, including the USA Today Network. She most recently worked in the public sector for the Nevada Department of Transportation.

Why do insurance companies deny claims?

As a policyholder, you likely expect it to cover any accident you may be involved in. Unfortunately, there are situations where your car insurance company can deny a claim. Common denials include a lapse in coverage, exceeding coverage limits or law violations.

Other factors that could contribute to a denied claim include:

  • Your accident details — police reports, eyewitness accounts and written statements — are inaccurate, missing or falsified
  • Your policy did not cover you, your vehicle or the driver at the time of the accident
  • There were pre-existing injuries not incurred during the accident
  • You were texting and driving at the time of the accident    

If your insurance company denies a claim, you should review your policy, coverage amount, accident details and other driver’s insurance claims before you begin an appeal of the decision.

Your policy lapsed

A lapse in coverage occurs when your policy expires or is canceled. If you miss a payment, you’ll typically have a short grace period of several days. Your coverage is often canceled 10-20 days after a missed payment and your insurance company attempts to contact you unsuccessfully by mail, email and phone.

During a lapse in coverage, if you cause an accident, injure someone or damage property, your car insurance company can deny your claim and you may have to cover costs out of pocket. In many states, driving without car insurance can cause revoking or suspension of your license, increase your insurance rates as a high-risk driver and result in legal costs, fines and jail time.

You didn’t buy enough coverage or high enough limits

You’ve been in an accident and have current coverage. You have paid on your policy for years and assume your accident costs will be covered. What if your car insurance doesn’t pay enough after processing your claim?

You may need more coverage or high enough limits on your coverage. At a minimum, drivers in most states must carry liability insurance, which covers bodily injury and property liability for other drivers in an accident. The most common liability coverage limits are $25,000 in bodily injury, $50,000 in bodily injury per accident and $25,000 in property damage per accident (25/50/25) – but these limits vary by state.

However, if your accident claim assessment is $50,000 worth of property damages, you could see a $25,000 out-of-pocket payment.

You had an accident with an uninsured driver

While liability insurance coverage is required in most states, uninsured motorist coverage isn’t. According to the Insurance Research Council (IRC), 12.6%, or one in eight drivers, were uninsured in 2019. Suppose you’re in an accident with an uninsured motorist, involved in a hit-and-run, or not provided with accurate insurance information during an accident. In that case, your insurance company may deny your claim.

If you don’t have uninsured motorist coverage — which helps pay for your injuries and hospital bills and repairs to your vehicle — you may be responsible for costs incurred during your accident when your insurance company denies your claim.

The at-fault driver’s insurance company denied your claim

When you’re rear-ended, side-swiped or are involved in a fender bender within your right of way, the fault typically lies with the other driver. Filing a claim and anticipating coverage is the general assumption. However, the at-fault driver’s insurance company can deny your claim. 

This happens for several reasons — fault may need to go through an investigation period, accident details are inaccurate or missing and coverage limits do not cover all costs. Sometimes, an insurance claim may be denied if you live in a no-fault state and a driver doesn’t carry the required Personal Injury Protection (PIP).

Learn more in detail about can an insurance company deny you coverage

What to do when an insurance company denies your claim

If your insurance claim is denied or you feel that the decision was unfair, there are several steps you can take to get more information. You should receive a letter from your insurance company outlining why your claim was denied. The following actions can help you learn more about your denied claim and potential resolutions.

  • Contact your insurance company. Reach out to your agent to discuss the decision and your questions. You may need to speak with the claims department and consumer help representative. Be honest, state your case clearly and ask for potential next steps.
  • Provide documentation. Sometimes, you may need to provide additional information, including the police report, eyewitness statements, photos, medical bills and repair estimates. You should also send a letter explaining your case to restate your case.  
  • Review your car insurance policy. Examine your policy coverage and ensure you understand the limitations in place. You can also speak with your insurance company’s appraisal services to discuss the decision and available options.

If attempting to resolve your claim with these initial steps is unsuccessful, you may need to continue your dispute by appealing the decision. 

How do you appeal a claim?

If you still feel your claim decision was wrongly denied or your compensation wasn’t sufficient after trying to resolve the decision initially, you can appeal it. Start by contacting your state’s insurance department to explain your dispute with their consumer service department and ask how you can submit a complaint. In some states, some representatives handle these disputes and can help you navigate the process.

After discussing with your state insurance department, you will likely need to start the appeal process. Depending on the circumstances, you may need to consult with an attorney or arbitrator.

Compile evidence and documentation

Provide the insurance company with copies of documentation, reports, photos, repair estimates, medical costs and eyewitness information. You may need to include additional information as requested or that was previously missing or inaccurate. If you’re attempting to dispute a fault decision, include photos of the positions, vehicle damage and skid marks.

Write an appeal letter to the insurance company

When crafting your appeal letter, be as specific and detailed as possible. Your letter should clearly explain your reasoning, supported by your evidence, with a request for what you believe is a fair judgment or compensation. 

It should include the following:

  • Insurance policy number and coverage details, insured vehicles and individuals on the policy
  • Accident details, such as location, time, date, parties involved and outcome from the police report
  • Date of denial and reasons given
  • Reason for appeal and explanation of how the evidence provided supports your appeal
  • Request for new decision or compensation for costs 

After your denial and first attempts at a resolution, you should immediately submit your appeal, as there are time limits around some requests, and decisions can take time.

Hire an attorney if you need to

Consider hiring an attorney if you seek a large compensation amount or are uncomfortable completing the appeal process independently. You can also contact an arbitrator who can review your settlement and case and provide expert insight and assessment of what you’ve been provided.

If you hire an attorney, they can draft the appeal letter for you, review the case with you, provide legal input on your decision and help you with all correspondence during the appeal process. The bar association offers a free legal referral service in many states to help you find appropriate representation.

Learn more about when and why your car insurer can cancel your coverage

Resources & Methodology

Sources

  1. Insurance Information Institute. “Facts + Statistics: Uninsured motorists.” Accessed March 2023.
  2. Insurance Information Institute. “What should I do if I am having trouble settling my claim?” Accessed March 2023. 
  3. North Carolina Department of Insurance. “After an accident.” Accessed March 2023.
  4. Progressive. “What happens if my car insurance lapses?” Accessed March 2023.

Why you can trust CarInsurance.com

The CarInsurance.com editorial team bases its reporting on data it commissioned Quadrant Information Services to gather on average auto insurance rates for more than 34K ZIP codes across the United States. Typically, averages are based on rates for a single, 40-year-old male, with no violations who commutes 12 miles to work each day and has a full-coverage policy with limits of 100/300/100 and a $500 deductible for collision and comprehensive coverage.

Laura Longero

Ask the Insurance Expert

Laura Longero

Executive Editor

Laura is an award-winning editor with experience in content and communications covering auto insurance and personal finance. She has written for several media outlets, including the USA Today Network. She most recently worked in the public sector for the Nevada Department of Transportation.

John McCormick

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John McCormick

Editorial Director

John is the editorial director for CarInsurance.com, Insurance.com and Insure.com. Before joining QuinStreet, John was a deputy editor at The Wall Street Journal and had been an editor and reporter at a number of other media outlets where he covered insurance, personal finance, and technology.

Leslie Kasperowicz

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Leslie Kasperowicz

Managing Editor

Leslie Kasperowicz is an insurance educator and content creation professional with nearly two decades of experience first directly in the insurance industry at Farmers Insurance and then as a writer, researcher, and educator for insurance shoppers writing for sites like ExpertInsuranceReviews.com and InsuranceHotline.com and managing content, now at CarInsurance.com.

Nupur Gambhir

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Nupur Gambhir

Managing Editor

Nupur Gambhir is a content editor and licensed life, health, and disability insurance expert. She has extensive experience bringing brands to life and has built award-nominated campaigns for travel and tech. Her insurance expertise has been featured in Bloomberg News, Forbes Advisor, CNET, Fortune, Slate, Real Simple, Lifehacker, The Financial Gym, and the end-of-life planning service.

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Contributing Researcher

Katrina Raenell is a writer, editor and educator with 20 years of experience in content and communications for international organizations, nonprofits and start-ups. In her previous roles, she was a communications manager for study abroad, content project manager for higher education and finance websites, reported on arts and culture, and was a managing editor for an online health and wellness publication.