Can I Go to Court If My Insurance Claim Is Denied?

Categories: Personal Injury

When you file an insurance claim, you expect that your claim will be honored and that the insurer will help you repay all of your accident losses. After all, isn’t that what insurance is for?
Unfortunately, this is not always how it works. Insurers have a profit-driven motive to pay out as little as possible for claims. They may expedite certain claims and honor most of the losses. Other times they will fight tooth and nail to deny a claim or deny certain areas of coverage.

What to Do When You’ve Been Denied

So, what can you do when your claim is denied? The answer depends on the type of insurance policy you were filing under and the specific language of that policy.

Many first-party claims (filing with your own insurance) contain forced arbitration clauses, meaning you could be unable to take your claim to court in the event of a dispute. Some third-party claims also include some form of mandatory alternative dispute resolution (ADR), although these arbitrations are less likely to be binding.

Overall, it always helps to have an experienced San Luis Obispo personal injury attorney in your corner when the claims process gets complicated. Your attorney can investigate the incident that led to your losses, examine the language of your policy, and work to refute common defenses insurers use to avoid liability.

Call Ernst Law Group today to schedule a free, no-obligation case review with one of our personal injury attorneys in San Luis Obispo. We will help you determine the next best steps you could take to assert your claim. Call (805) 678-0272 or contact us online to schedule your free appointment now.

First-Party Claims

Insurers tend to have much more control over their policy-holders than they do over third-party claimants.

A first-party claimant is someone who is trying to file under their own insurance policy, such as when they want to file a homeowner’s claim after a bad storm causes roof damage. Filing for collision or comprehensive car insurance coverage also counts as a first-party claim.

When you file a first-party claim, insurers must make a good faith effort to honor your claim. If they want to deny you coverage for certain areas or deny your entire claim, they must provide sound reasons for doing so.

Unfortunately, when advocating for yourself, you may be limited in your legal options. Many first-party coverage policies have mandatory binding arbitration clauses.

Mandatory Binding Arbitration Clauses

What does it mean to have a mandatory binding arbitration clause? It means that in order to dispute your claim, you have to agree to participate in arbitration.

Arbitration is similar to a trial but without many of the legal trappings that add time and expense to a case. A neutral third-party (arbiter) hears arguments and evidence from both sides. Then, they will issue a judgment or propose a compromise that can satisfy both sides.

Arbitration is different from mediation, another common form of ADR, in that a judgment comes at the end. This judgment may even be binding, meaning that once it has been issued, neither side will have the opportunity to overturn it except through legal appeal. Even then, getting an appeal after a binding arbitration can be difficult, if not impossible.

Other times, the arbitration will not be binding. In these cases, the decision is simply a milestone along a longer process that may or may not allow a trial at a later date.

So, put simply, you may be unable to sue your own insurance company if they have a mandatory arbitration clause.

Even still, you and your attorney can examine the language of the contract, and together you may be able to explore options outside those listed. Many insurance contracts can be disputed as unfair in court, for example. You always owe it to yourself to explore all available options and seek the possibility of having your full claim honored.

Stand your ground after receiving notice of a claim denial. Work with an experienced personal injury attorney in San Luis Obispo, address each reason for denial, and assert your right to coverage according to the terms of your policy.

Forced Arbitration Less Likely in Third-Party Claims

A third-party claim occurs when someone else causes an injury or damages your property. The most common example is when a car accident happens and someone files under an at-fault driver’s third-party property damage liability (PDL) and bodily injury liability (BIL) policies.

Third-party contracts tend to not enforce mandatory arbitration as often as first-party claims. This is likely because the injured person – the third-party claimant – did not formally enter into a contract with the insurance company before the accident happened.

Without a contract, it’s more difficult for an insurer to deny coverage and block further legal action outside of a binding arbitration agreement.

Why You Want Your Day in Court After an Insurance Claim Denial

Always fight to pursue your claim in court through a lawsuit once it is denied. This increases your chances of getting the maximum compensation available for your damages.

Arbitration can be a great option for many cases because it can reduce time and expense. However, arbitration can be much more difficult to litigate. Essentially, many factors are put outside of you and your attorney’s control during these arbitration sessions. It may even be impossible for the final judgment to be overturned.

On the other hand, a trial allows you to take your chances with a jury. Your attorney can subpoena witnesses and information during a discovery period. You may also have the opportunity to appeal a verdict if you feel that justice was not carried out in a way consistent with state or federal law.

Insurance companies have a lot of resources available to fight claims. But when the insurer knows that a case can be won in court, then they are more likely to offer a reasonable settlement. However, when the insurer has options like forcing arbitration, they may risk receiving an unfavorable decision simply because more factors are in their control.

Work with Experienced San Luis Obispo Personal Injury Lawyers

When you receive a denial from your insurance company, call an experienced San Luis Obispo firm.

Ernst Law Group can advocate for you and interpret the language of your insurance policy. We work hard to gather evidence that satisfies the claim’s requirements for reimbursement. For instance, your attorney can help you establish fault and document all of your losses.

Call us today to talk about your case and learn what strategies you could have available. Simply dial (805) 678-0272 or contact us online to schedule a free, no-obligation case review now.