The worst thing to experience after suffering injuries in a motor vehicle accident is to have the at-fault insurance company deny your claim.
In one kindly-worded letter, your hopes to fully recover seem completely and utterly dashed. But all hope is not lost and the road to recovery has a bit longer to go. The most important thing to do is to understand the reason for the denial so that you may react appropriately.
Reasons for Denial
1. No Active Policy/Wrong Insurance Company
While this may seem silly, a lot of denial letters are written because of faulty information drivers initially provide to police officers following an accident. Perhaps the other party gave the wrong information, or the number of policy that has long expired due to non-payment, or the driver wrote down the wrong policy number. Even police reports contain clerical errors which can lead to a headache for a client. When you read a denial letter, the reason can be as simple as: "the driver was not insured by this company at the time of the accident."
In that case, the solution is fairly simple: find the right policy or be prepared for an uninsured motorist claim with your own insurance. See below for more information.
2. Contributory Negligence
In North Carolina an insurance company can deny your claim because they believe you may have contributed to the accident. Your can read more on contributory negligence here.
Whether you were distracted while driving or exceeding the speed limit prior to collision or failed to control your vehicle upon impact, insurance companies often use contributory negligence to get out of paying the claims.
Once your claim is denied based on contributory negligence, the only remedy you have remaining is to file a lawsuit and prove in a court of law that you didn't contribute to the accident and that the at-fault party is wholly responsible.
3. Deny Liability Completely
The insurance company can deny liability if they believe that the insured did not cause the accident. In other words, the company believes you caused the accident instead and therefore they won't pay you a penny.
This is the legal equivalent of running into a brick wall after working so hard to recover. Once again the client is left with one of three options: let the claim go (NEVER!), file a claim with your own insurance, or jump over the wall by falling a lawsuit.
1. Finding the Right Policy
In a perfect world, you could look up a driver and have his or her insurance information on hand. In reality, you are left two options: ask for the correct information from the policy holder, contact the Department of Motor Vehicles (DMV) or go on a fishing expedition.
Asking the other driver for his or her information can be an awkward but necessary encounter on the road to recovery. One problem you may face is that he or she is unwilling to give you the correct information, leading you around in circles until you just want to give up. Giving false information is a misdemeanor, but that may be less than paying an increase in insurance premiums.
Another option is to contact the Department of Motor Vehicle. If you have the at-fault driver's license plate number and ideally the vehicle's VIN, the DMV may be able to provide you with the details of auto insurance coverage on record.
If all else fails, you may need to go on a fishing expedition: call every insurance company to see if they insure the at-fault driver. Insurance companies cannot tell you the details of the policy, but they do need to disclose whether or not the driver holds an active policy with them. A needle in a haystack, this task is proven difficult and tiresome and oftentimes unrewarding.
2. File a Claim with Your Own Insurance
In the case that you received a denial letter from at-fault insurance carrier following an accident, you do have the option to file a claim with your own auto insurance carrier.
This especially comes in handy when the other party does not have insurance and therefore you can use Uninsured Motorist Coverage (UM Coverage) - a required clause in North Carolina insurance policies. Also, if the other driver's insurance doesn't cover all of your losses, you can use Underinsured Motorist Coverage (UIM Coverage) should you have it. Your Collision Coverage will cover the property damages.
While this does allow you to pursue a full recovery, your insurance premiums will go up if you or the other party files a claim for property damage or bodily injury against your policy. You will also have an accident on your driving record for the next five years which will cause all insurance companies to make you pay higher premiums.
While the United States is often mocked for the amount of frivolous lawsuits filed each year, it remains one of the last resorts for people looking to recover.
If you have not retained an attorney by now, now is the time to do it. A lawsuit requires someone to convince the jury exactly why you are not at fault and no one knows better than an attorney trained in the ways of the courtroom. It is his or her job to look over the facts and present evidence to the jury showing that the client is not at fault and due a full recovery. Attorneys understand the law and can fight any denial letter.