What Happens if an Insurance Company Refuses to Pay a Claim?

If you or somebody you care about has sustained an injury caused by the actions of another individual or company in Washington, then you should be able to recover compensation for your losses. The vast majority of personal injury claims in this state are resolved through settlements with insurance carriers. But what happens if the insurance carrier refuses to offer a fair settlement amount? Here, we want to discuss the steps you can take to help ensure you receive fair compensation.

Why Would an Insurance Carrier Refuse to Pay a Claim?

There are various reasons why insurance carriers would refuse to deny seemingly valid claims. This can include, but is not limited to, the following:

  • The type of claim is not covered by the insurance policy
  • The insurance coverage has lapsed or expired
  • Mistakes were made when filing the claim form
  • Individuals did not seek medical care immediately
  • The insurance carrier was not notified within their deadline
  • There were false or exaggerated claims made to the insurance carrier

In some situations, an insurance carrier could deny a claim based purely on bad faith reasons. Insurance carriers may offer significant justifications for denying a claim, and they could try to bury individuals in paperwork and insurance jargon. If you believe that an insurance carrier is acting in bad faith, you may be able to recover additional types of compensation above and beyond what your original claim would have paid.

The state of Washington does have bad faith insurance laws that require all persons involved in an insurance matter to act in good faith, practice honesty and equity, and abstain from deception (RCW § 48.01. 030). Ultimately, if your claim is valid, you should be able to receive compensation from the insurance carrier. The unfortunate reality is that insurance carriers have deep pockets, and they also have legal teams. That is why we continually advise our clients to work with an attorney so they can have an advocate ready to stand up for them throughout this process.

What to do if Your Claim is Denied

If you believe that your insurance claim was mistakenly denied, it is important to contact a skilled attorney as soon as possible. There are various steps that you and your attorney will take in order to recover the compensation you are entitled to. This includes:

  1. Asking for a detailed explanation of why the claim was denied 
  2. Reviewing all evidence related to the claim
  3. Thoroughly reviewing the insurance policy
  4. Sending a demand letter asking for payment
  5. Going through the insurance carrier’s official appeals process
  6. Filing a civil personal injury lawsuit against the at-fault party and the insurance carrier

It is crucial to understand that insurance carriers are for-profit entities. They are going to play hardball, even if they know they will have to make a payment eventually. It is not uncommon for an insurance carrier to deny a claim. However, when you have a Seattle personal injury attorney by your side, you will have an advocate who can push back against the claim denial.