How or When Insurance Companies Won’t Settle a Claim
Insurance companies may at times adopt an adversarial position against the insured party’s claim for personal injuries. While this is least expected, clients are definitely shocked on learning that an insurance provider offered an alternative version of the accident to eliminate them from claim settlement. Your insurance claim may be denied as a result of no-fault insurance laws, an expired insurance policy (or excluded driver) or when the policy adjuster denies liability for the insured party. Whatever the reason, an explanation should be given to the insured by the claims adjuster.
Reasons an Insurance Company Won’t Settle
1. No-fault Insurance Laws
Third party immunity may apply in states where no-fault insurance laws are in effect. This means that third party drivers enjoy immunity against minor personal injury claims in states that allow no-fault insurance laws. For damages exceeding a certain amount or where the serious injury threshold is achieved, the insured may claim for pain and suffering. Serious injuries, however, may call for a personal injury attorney, as such cases may be complicated. It is only in states with traditional fault laws where the insured has every right to pursue the at-fault driver claims for damages.
What no-fault insurance entails
No-fault insurance, also called Personal Injury Protection, is an automobile insurance that doesn’t care about the at-fault driver. Under the law, it doesn’t matter who caused the collision, and there is no proof required that another driver was at fault. The insurance company pays for the damages directly. This differs from the traditional liability insurance in which the at-fault driver’s insurance company should pay for losses or damages.
What no fault-insurance covers
The no-fault insurance covers wages lost during recovery, death benefits, funeral expenses, and medical and therapy costs. The amount paid depends on the amount of insurance premium purchased.
What no-fault insurance does not cover
The no-fault insurance does not cover emotional distress, pain, or suffering. It doesn’t cover car repair bills or personal property damaged inside the car at the time of the accident. Except where serious injury threshold is achieved, the insured is also not allowed to file a lawsuit against the at-fault driver for pain and suffering.
2. Expired Insurance Policy And Excluded Driver
The insurer can deny a legitimate claim if either the at-fault driver’s license is expired or the driver in question is not covered in the policy. While driving without a valid license is considered illegal, the penalty may mostly attract a stiff fine or suspension of the license.
In the case of an excluded driver, a claim for personal injury may be denied if the at-fault driver is exempted from the policy. The insurance company’s argument may be that, although the policy covers the policy holder’s family members and others allowed to drive the insured car, the at-fault driver may not necessarily be covered by the policy.
3. Denial Based On Insufficient Coverage
Unscrupulous adjusters may deny a claim for personal injury on the basis of “insufficient coverage” in states that have traditional fault laws.
Insufficient coverage simply means the at-fault driver has no sufficient insurance to cover all damages. This mostly occurs when claims for personal injury exceed the limits of the at-fault driver’s insurance policy. This requires the insurance company to pay all the money under the insured policy, to enable the insured party to file a lawsuit against the at-fault driver for personal injury. Since many insurance adjusters wrongfully deny a claim for personal injury based on insufficient coverage, a personal injury attorney is required as the case may be too serious to handle alone.
In sum,an insurance company may fail to settle a claim for all the genuine and legitimate reasons. Whether one resides in a no-fault or a traditional fault insurance state, an experienced personal injury attorney is required as long as the claim is wrongfully denied.