Denied Coverage? Here’s How to Challenge an Insurance Dispute
Receiving a denial letter from your insurance company can be a frustrating and disheartening experience, especially after a significant loss. You pay your premiums faithfully, trusting that you will be protected when you need it most. When that trust is broken, it's important to know you have options. If your insurance provider has failed to uphold its end of the bargain, seeking help from a seasoned attorney can make all the difference.
The Law Offices of David H. Schwartz, Inc. provides dedicated legal representation to individuals across the San Francisco Bay Area, including San Jose, Santa Clara, San Mateo, Alameda County, and Oakland. With over 45 years of experience, Attorney David Schwartz possesses a deep understanding of complex litigation and offers steadfast support to individuals and businesses whose claims have been unfairly denied.
Understanding Your Insurance Policy
Before you can challenge a denial, you must first understand the reason behind it. Your insurance policy is a detailed contract outlining what is covered, what is excluded, and the conditions under which the policy operates. These documents are often filled with complex legal language that can be difficult to interpret.
Start by obtaining a complete copy of your policy. Pay close attention to the declarations page, which summarizes your coverage limits, as well as the sections on definitions, exclusions, and duties after a loss. The insurance company's denial letter should specify the exact policy provisions they believe justify their decision. Carefully compare their reasoning with the language in your policy. Sometimes, a denial is based on a simple misinterpretation of the facts or the policy itself.
Common Reasons for Insurance Claim Denials
Insurance companies deny claims for a wide variety of reasons. Some are legitimate, while others may represent a bad-faith attempt to avoid paying what they owe.
Missed Deadlines or Incomplete Information
Most policies have strict deadlines for filing a claim and submitting required documentation, known as a "proof of loss." Failing to meet these timelines or providing incomplete information may result in a denial. It is important to document everything and communicate promptly with your insurer after an incident.
Coverage Exclusions
Policies often contain specific exclusions for certain types of events or damages. For example, a standard homeowner's policy might exclude damage from floods or earthquakes unless you have purchased separate coverage. The insurer will deny a claim if it determines that the cause of loss falls under one of these exclusions.
Disagreements Over the Value of the Loss
You and your insurer may disagree on the cost of repairing or replacing damaged property. The company's adjuster may undervalue your claim, resulting in a partial denial or an insufficient settlement offer. You have the right to get your own independent estimates to contest their valuation.
Allegations of Misrepresentation
If the insurance company believes you provided false information on your application or during the claim process, they may deny your claim and even rescind your policy. This is a serious allegation that requires a firm response.
An Overview of California's Insurance Laws
Policyholders in California are protected by specific laws and regulations designed to promote fair dealings. A key principle is the "implied covenant of good faith and fair dealing," which is automatically read into every insurance contract in the state. This legal duty requires insurance companies to act fairly and honestly toward their policyholders.
When an insurer unreasonably withholds policy benefits, it may be acting in "bad faith." Examples of bad faith actions include:
Denying a claim without conducting a thorough investigation.
Misrepresenting facts or policy provisions to the claimant.
Failing to approve or deny a claim within a reasonable time.
Not attempting to reach a fair and equitable settlement when liability is clear.
Offering a settlement that is significantly lower than the value of the claim.
If an insurance company is found to have acted in bad faith, a policyholder may be able to sue not only for the benefits owed under the policy but also for other damages caused by the insurer’s conduct. This can include emotional distress and, in some cases, punitive damages intended to punish the company for its wrongful behavior.
How to Challenge a Denial
If you believe your claim was wrongly denied, you don’t have to accept the decision. Taking organized, strategic steps can improve your chances of a successful appeal.
1. Request the Denial in Writing
Always insist on a written explanation for the denial. The letter should clearly state the reasons for the company’s decision and reference the specific policy language on which it is relying. This document is a critical piece of evidence for your appeal.
2. Gather All Your Documentation
Organize every piece of paper related to your claim. This includes your full insurance policy, the denial letter, all correspondence with the insurer, photos or videos of the damage, repair estimates, receipts for temporary repairs, and any other relevant records. A well-documented file strengthens your position.
3. Write a Formal Appeal Letter
Draft a letter to the insurance company formally disputing their decision. In the letter, clearly state why you believe the denial is incorrect. Address each point from their denial letter, providing counterarguments and referencing specific policy language or evidence that supports your claim. Maintain a professional tone and focus on the facts. Send the letter via certified mail to have proof of delivery.
4. Consider Speaking with a Lawyer
If your initial appeal is unsuccessful or if the issues are complex, it may be time to consult an attorney. An attorney who handles insurance disputes can review your case, interpret the policy, and advise you on the best course of action. They can communicate with the insurance company on your behalf, apply legal pressure, and, if needed, file a lawsuit to recover the benefits you are owed.
Insurance Dispute Attorney Serving the San Francisco Bay Area
When you hire The Law Offices of David H. Schwartz, INC., you are partnering with a firm prepared to fight for your interests. Success in legal disputes, which can be vital for a company's survival, depends on the seasoned perspective of a dedicated business litigation attorney. For over 45 years, Attorney David Schwartz has guided California clients through complex cases involving business litigation, shareholder derivative actions, and trade secret disputes.
He views legal strategy as a dynamic process of advances, feints, and retreats, knowing that success lies in balancing individual battles with the overall objective. His firm provides trustworthy representation to businesses and individuals across the Bay Area, including San Francisco, San Jose, Santa Clara, San Mateo, Alameda County, and Oakland. Call today to schedule a consultation for your insurance dispute.