When you purchase insurance, your agent will likely be pleasant, attentive, and most importantly, responsive to your questions and concerns about the policy. Unfortunately, that demeanor can shift when it is time to file a claim.
You might find it more difficult to contact your agent when you are seeking compensation for an accident. They may not become as friendly and they may demand more information about your claim. Then, after making you jump through several hoops, they could outright deny your claim.
While there could be legitimate reasons for them to arrive at this decision, there are some companies that deny claims without grounds. When you encounter an insurance company that is obstinate in fulfilling its obligations to you, a lawyer can fight on your behalf.
Some common insurance disputes include:
- Lapse in coverage: Insurance companies might deny your claim saying that there was a lapse in coverage or that a particular procedure is not covered by a policy.
- Lack of coverage: An insurance adjuster for auto insurance may say that the damage to your vehicle is not covered under your current policy.
- Deliberate damage: After a fire destroys a family’s home, the insurance company could accuse the family of arson to collect on payments.
- Misunderstanding: Aspects of the policy could have been confused by the policy holder to think certain claims were covered under the current insurance policy.
Insurance companies are relying on policy holders to accept these final decisions and to move on. You should not allow these companies to take advantage of you.
What Laws Protect Policy Holders?
States have different laws that protect policy holders from insurance companies that take advantage of their clients. Many, including New Jersey, adopted a version of the Unfair Claims Settlement Practices Act, which holds insurance companies accountable for unfair claim denials.
Specifics of the law vary by state. New Jersey prohibits certain bad behavior if committed with such frequency that it indicates a general business practice.
The law gives policy holders an added level of protection should they feel as if their insurance company is treating them unfairly. If you experience a denial of your claim, you may feel distressed, especially after you have experienced a traumatic event, such as a car accident or a house fire.
What Steps Can I Take if My Claim Is Denied?
You should not accept a denied claim if it is unwarranted. While it might be unclear if they have violated the law, there are steps you should take to appeal the decision:
- Contact your insurance agent. The person that sold you your insurance in the first place might be able to work as an advocate for you on your behalf within the company, particularly if they wish to keep you as a client.
- Appeal to an executive. Most insurance companies have a formal appeals process. They may not volunteer that information, but they will share it with you if you ask.
- Complain to an ombudsman. New Jersey’s Department of Banking and Insurance has an ombudsman whose responsibility it is to assist those consumers who are having trouble with insurance availability, claims processing, coverage questions, and other matters. You can reach out to them to resolve your case.
- File a complaint with state regulators. Insurance companies are regulated at the state level, so you will want to take any complaint about them to the state. The negative of this is if the state is already overwhelmed with complaints, it may take them time to get to yours.
- Seek arbitration. Certain policies allow for arbitration to settle a claim, and this might be an option. It is cheaper and quicker than going to court to resolve your case.
- File a legal claim. A lawyer can file a claim against your insurance company. This becomes a matter for the courts to decide.
In New Jersey, to prove that a denial was made in bad faith, your case must meet the fairly debatable standard. The standard means that the company did not have a reasonable reason to deny the claim, which places the burden of proof on you and not the insurance company.
Coupled with that, insurance companies take these cases very seriously and will go to extraordinary lengths to prove they acted properly. Some companies will countersue the policy holder, arguing that the person did not act in good faith.
To be successful in proving a case against an insurance company, the plaintiff must prove more than just negligence or insurance error. They must demonstrate that there was an intentional act on behalf of the insurance company when they knowingly denied a claim.
To prepare for your case, it is vital that you keep all documents related to your claim. Save any emails that you had with the agents, as well as any correspondences that you sent to them. You should also request that agents that you have phone calls with follow-up on those calls, with an email confirming the content of that conversation.
Warren Insurance Lawyers at Herold Law Can Take on Insurance Companies to Help Resolve Your Disputes
Some insurance companies will look for multiple ways to avoid paying out the money they owe. If you need help with an insurance dispute, our Warren insurance lawyers at Herold Law, P.A. will fight on your behalf. Call us at 908-679-5011 or contact us online to schedule an initial consultation. Located in Warren, New Jersey, we serve clients throughout the surrounding areas, including Plainfield.