Can I Sue My Insurance Company If They Deny My Claim After a Car Accident?
Yes, you can sue your insurance company if it denies your claim after a car accident. Massachusetts applies no-fault auto insurance rules. “No-fault” means drivers involved in an accident must first seek compensation from their own insurance company. This rule applies regardless of who caused the accident.
You might think that insurance companies pay claims more readily when their own customers file the claims. However, auto insurance companies in Massachusetts regularly deny insurance claims. These denials can place customers in the difficult position of having to sue their auto insurer.
Here are some facts about auto insurance in Massachusetts and how to deal with your insurance company if it denies your claim after an accident.
How Car Insurance Works in Massachusetts
When you buy auto insurance, you enter into a contract with an insurance company. Insurance companies are regulated by the Massachusetts Division of Insurance (DOI). DOI ensures that the policy you purchased complies with Massachusetts law.
Your auto insurance policy sets out how you will be paid for injuries sustained in a car accident. Two terms you should know when reading your auto insurance policy are:
- Medical payments coverage (med pay): Under this coverage, your auto insurer agrees to pay for any medical bills you or your passengers incur as the result of car accident injuries. If your health insurance pays the medical bills or you win a lawsuit or settlement against another driver, you must reimburse your insurance company for med pay payments.
- Personal injury protection (PIP): This is like med pay because PIP covers all medical bills for you and your passengers up to the policy limits. Unlike med pay, PIP also covers lost wages. If you receive compensation or health insurance coverage for your medical bills, you do not need to reimburse your insurance company for PIP payments.
Massachusetts requires all auto insurance policies to include at least $8,000 in PIP coverage. Med pay benefits are optional.
What Happens After a Car Accident in Massachusetts?
After a car accident, you will exchange information with the other drivers involved in the crash. You will notify your insurance company of the accident. But unlike most other states, you will file a claim with your insurance company. This will be true even if another driver caused the accident.
Seek Medical Attention
Your claim will be directed to compensation for your out-of-pocket medical expenses. Thus, you should seek medical attention so you can provide medical records in support of your claim.
Your medical providers can also determine whether you can work while you recover from your injuries. If you cannot work, you might need a letter from your doctor to prove to the insurance company that it was medically necessary. Remember, PIP coverage can provide wage replacement compensation.
File the Claim with Supporting Documentation
Your claim will describe what happened and include documentation to support your description. Insurance companies usually require documentation for your claim for a few reasons:
- Investigation: The insurance company needs basic information that it can verify with police reports and other evidence.
- Fraud: Insurance companies require documentation of your injuries and how they occurred to avoid fraud.
- Certainty: An insurance company must review medical bills and paycheck stubs to determine the amount of compensation.
Under Massachusetts law, auto insurers must investigate claims and decide whether to pay or deny them in a “prompt and reasonable” time. However, the law does not define “prompt and reasonable.” As a result, insurance companies can leave injured people in limbo, waiting for an insurance decision.
Receive a Claim Decision
If the insurance company decides to pay the claim, it will send a check for the expenses covered by the insurance policy.
If the insurance company denies the claim, you will receive an explanation of the denial. Some of the reasons an insurance company might deny the claim include:
- The policy does not cover the driver: Insurance companies require you to identify all licensed drivers who drive the car. If the policy does not list the driver at the time of the accident, the insurance company can deny the claim.
- The policy does not cover the vehicle: Insurance policies list all covered vehicles. If the accident occurred in an unlisted vehicle, the insurance company can deny a claim.
- The injury is not proven: The insurance company will deny a claim if it believes the injury is faked or exaggerated.
- The injury is a pre-existing condition: A claim denial will be issued if the insurance company believes you had the injury before the accident.
Keep in mind that a claim denial does not necessarily mean that your insurer believes you lied. However, it does mean that you will likely need additional evidence to challenge the denial.
Challenge a Claim Denial
You have a few options to challenge a claim denial, including a lawsuit against your insurance company. But you usually start with administrative channels because you might get a favorable decision quicker.
- Request review: Within the insurance company, supervisors and managers have the power to reverse decisions. You can usually request a higher-level review of a denial.
- File a complaint: DOI has a process to report complaints against your insurance company. A complaint filed with DOI can push an insurance company to reverse its denial.
When administrative review does not move the insurance company from its denial, a lawsuit might be necessary.
File a Lawsuit Against Your Insurance Company
An insurance policy is a contract. You can file a lawsuit against your insurance company for breaching the contract if the insurance company has violated the terms of the policy.
Often, the insurance company will not violate the express terms of the policy, but rather its implied obligation of good faith and fair dealing. If the insurer has violated the spirit of the agreement, you can file a bad faith insurance lawsuit.
Insurance company practices are also restricted under Massachusetts law. Some of the prohibited practices include:
- Unreasonable delay.
- Unreasonable claim denials.
- Failure to investigate a claim.
- Misrepresentation of facts or policy coverage.
A lawsuit is usually filed as a last resort. But a lawsuit might be necessary to reverse a decision by your insurance company to deny your claim.