Insurance companies sometimes deny claims, leaving policyholders frustrated and unsure of what to do next. If your insurance company denies your claim, you have legal rights to challenge their decision and seek fair compensation. Understanding these rights can help you take the right steps to protect your interests.
Reasons insurers deny claims
Insurance companies may deny claims for various reasons. They might argue that the policy does not cover the loss or that the policyholder provided incorrect information. Sometimes, insurers claim the damage resulted from pre-existing conditions or that the policyholder failed to follow claim procedures. In some cases, insurers may act in bad faith by delaying or refusing payment without valid reasons.
Policyholder rights under California law
In California, policyholders have strong legal protections against unfair insurance practices. The California Insurance Code requires insurers to act in good faith and handle claims fairly. If an insurance company denies a claim, they must provide a written explanation with specific reasons. Policyholders have the right to request further clarification and submit additional evidence to support their claim.
Steps to take after a claim denial
If your claim is denied, start by reviewing your policy to understand coverage details. Request a written explanation from your insurer and gather any relevant documents, such as photos, receipts, and expert evaluations. You can file an appeal with your insurance company and provide additional evidence to support your claim. If the insurer still refuses to pay, you may file a complaint with the California Department of Insurance for further review.
When insurers act in bad faith
If an insurer wrongfully denies a claim, delays payment, or misrepresents policy terms, they may be acting in bad faith. California law allows policyholders to seek damages, including compensation beyond the original claim amount. Courts may award punitive damages if the insurer’s actions were particularly harmful or deceptive.
Protecting your rights
Understanding your policy and taking prompt action after a denial can improve your chances of receiving fair compensation. Keep detailed records of all communications and evidence related to your claim. If your insurer refuses to handle your claim fairly, you have legal options to hold them accountable.
