Time after time, we say that most insurance companies are not on your side. It might seem that they are looking out for your interests, but in reality, it’s their own wallets that they’re trying to protect.

We have seen this same story a bunch of times with our clients, where the insurance companies try to do everything possible, within their means, to provide lowball offers to victims or even worse: completely deny their claims.

But here at The Nick Schnyder Law Firm, we don’t shy away from a fight against the insurance companies. In fact, we relish in the opportunity to confront these greedy insurers, and when we win, it gives us great satisfaction knowing that we helped our clients get the compensation they deserve.

In our blog article, we will explain the reasons why insurers refuse to pay out claims so you can know the importance of having an attorney at your side that will deal with them to ensure you are compensated.

 

Reasons why claims are denied

Sadly, it is quite common to see insurance companies deny claims. According to the latest report by the Kaiser Family Foundation, in 2019, around 41 million insurance claims were denied that year. In Georgia, the average rate for denials was 26.2%. In other words, one out of four claims in the Peach State were being rejected.

Insurance companies use various reasons to deny claims. The most common excuses they stick to are:

• Lack of coverage. Insurance companies may excuse themselves by saying your current insurance policy doesn’t cover your claim.
• Errors in your application forms. Make sure you fill out your applications well without any ambiguity. By not doing so, the insurance company will argue that there are enough legal grounds to deny your claim.
• Claim errors. It is recommended you know what the deadlines are to notify the insurance company that you’re filing a claim. Failing to do so is enough reason for them to deny your request.
• Insurance fraud. We cannot stress enough. Please do everything possible to avoid these mistakes. Do not submit false information or exaggerate your claim. Not only will your claim be denied, but you are committing a felony that can lead to a prison sentence  of about 2 to 10 years.
• Bad faith. Out of all these reasons, this is the dirtiest trick insurance companies have up their sleeves. If the insurer gives you a bunch of excuses and uses complicated insurance vernaculars, they are simply avoiding paying out your claim.

Knowing the reasons why an insurance company can deny your claim will help you understand how to avoid them, which becomes the first step in receiving compensation. In addition, learning what situations are considered personal injury cases can also prevent you from making errors when filing application forms and notifying insurers.

 

Legal obligations that insurance companies have

Insurance companies will do everything in their power to deny your claims. But you should not be afraid to pull your punches to be fairly compensated. You can also take legal action to ensure not missing out on the benefits.

Since Georgia is a direct action state, in the event that someone were to get injured in an accident, they can file a lawsuit against the insurance company instead of the policyholder. What does this mean exactly? There is no legal contact between the victim and the other party that was involved in the incident. Instead, it is only between the injured and the other person’s insurer.

Also, by having a direct action system in place, according to the Georgia Code § 40-2-140 in compliance with the Unification Carrier Registration Act of 2005, all insurance companies in the state must fulfill obligations they have to their policyholders. Insurers must adhere to their policies in providing their services by acting in good faith. In other words, they must avoid:

• Providing an inadequate and delayed investigation into the policyholder’s claim.
• Unwilling to pay for damages when there is a clear liability established in a claim.
• Denying or not approving a claim in a specified timeframe.
• Giving little or no information to explain why the claim was denied.
• Refusing to defend the policyholder in a liability lawsuit, in which at least one of the claims is covered by the insurance company’s policies.
• Rejecting a claim, after the contestability period deadline has passed, due to an error in the policyholder’s application form.

Despite the fact that insurance companies are legally obligated to avert these types of situations, that doesn’t necessarily mean they are going to protect victims. The insurers usually act out of negligence with their policyholders.

In negligence cases, between the plaintiff (policyholder) and the defendant (insurer), there is a relationship known as the duty of care. Insurance companies are obligated to provide their customers with services and policies that help them with their issues. If they don’t, well, there must be proof that the insurer failed to comply with the duty of care.

Another issue at hand in a negligence case is proving that there was a breach of duty by an insurance company. Some most common infringements are:

• Being misled or omitted important information by the insurer.
• An insurance agent twisting the coverage included in a policy.
• Confusing policyholders concerning required application forms.
• Insurance agents decline to notify a claim to the insurance company.

Remember, insurance companies are not invincible. Like every company, they are also obligated legally to help out their customers in times of need. Don’t let ignorance be their bliss, know that if you feel you’re being tricked, most likely you are. Therefore, having experienced accident attorneys fighting on your side, will help you get the benefits you deserve.  

 

Why should you have an attorney on your side?

Dealing with insurance companies can become a headache. As previously mentioned, they might use dirty tactics to trick you into not pursuing your compensation or taking legal action against them. Insurers might even rely on your desperation and tell you that nothing is wrong and you don’t have a claim in court.

However, knowing what is their modus operandi in denying claims can help you identify those points to make a great case in court. Also, at The Nick Schnyder Law Firm, we have previously pinpointed some tips in negotiations with insurers, where one of them is to not accept their initial offer. This first settlement is usually low and a tactic for them to show that, if you accept it, your case is closed.

Therefore, if you feel that the insurance company is avoiding at all costs and isn’t providing you with the benefits you deserve, contact us to receive a free consultation. We are here to fight for your compensation and deal with those greedy insurers so you don’t have to.