What to Do If Your Insurance Claim Is Denied

A denial letter is not always the last word. Many denials are reversed when the policyholder supplies missing documents or points to the policy language. Here is how to respond.

1. Get the denial in writing

Ask for a written explanation that cites the specific policy provision relied on. Write down the date, the adjuster's name and the claim number for every call.

2. Read your policy

Find the provision quoted in the denial and read it, along with the definitions and exclusions sections. Common reasons for denial include:

• The loss is excluded (for example, flood under a standard homeowners policy).
• Late notice of the claim.
• Missing information or documents.
• A dispute about whether treatment was medically necessary.
• Lapsed coverage or unpaid premium.
• A dispute about who was at fault (for third-party auto claims).

3. Respond and appeal

• Send any missing documents, photos, estimates or medical records.
• Write a short appeal letter: what was denied, why the policy covers it, and what evidence you are attaching. Keep copies.
• Meet every deadline in the denial letter.

Health insurance: special rights

Under the Affordable Care Act, most health plans must offer an internal appeal, and if that fails, an external review by an independent reviewer whose decision the plan must follow (HealthCare.gov, 45 CFR 147.136). You generally have 180 days from the denial to file the internal appeal, and urgent-care claims are decided on an expedited basis.

Auto claims against another driver's insurer

A third-party insurer can deny liability if it believes its driver was not at fault. You can provide more evidence, claim under your own collision or uninsured motorist coverage, or file a lawsuit against the at-fault driver before the statute of limitations runs out.

4. Complain to your state insurance department

Every state has an insurance regulator that accepts consumer complaints and can require the insurer to respond. A complaint is free and often prompts a second look.

5. Consider bad faith

Insurers owe their own policyholders a duty of good faith and fair dealing. Unreasonably denying or delaying a valid claim can be bad faith, which in many states allows damages beyond the policy amount (Cornell LII). Bad faith rules differ by state and usually do not apply to claims against someone else's insurer.

When to get help

Talk to a lawyer if a large claim is denied, the insurer stops responding, or a deadline is close. For injury claims, see a personal injury lawyer; for disability benefits, see what to do if your long-term disability claim is denied.

Sources

1. HealthCare.gov: Appealing a health plan decision
2. Cornell Law School LII: Bad faith
3. Cornell Law School LII: 45 CFR 147.136, Internal claims and appeals and external review