Insurance claim disputes occur when insurers and policyholders argue over aspects of claims, such as coverage, payouts, and delays. These are a common occurrence, but they don’t have to land you in court or result in financial losses. There are ways to deal with them effectively.
Read the rest of this article to learn about common insurance claim disputes, how to handle them, how you can prevent them, and when you should contact a lawyer for assistance.
What are Common Insurance Claim Disputes?
Unpaid or delayed claims aren’t the only reasons for disputes between policyholders and insurers. Arguments and disagreements can arise over the following situations:
- Insufficient settlements
- Lack of coverage
- Repeated documentation requests
- Misunderstandings over policy terms and clauses
- Not contacting policyholders over lapsed or cancelled policies
- Coverage disagreements
How Can You Prevent Insurance Claim Disputes?
You can avoid the hassle of denied claims or other insurance disputes by ensuring you take some precautionary measures before filing and submitting a claim to your insurance company.
Read and Understand Your Policy
You should take the time to understand your insurance policy and know exactly what your coverage covers and what it doesn’t, so that you don’t submit a claim that’s denied.
Be Mindful of Lapses and Terminations
It’s important to know what will cause a lapse in your coverage or a cancellation of your policy. These should be outlined in your insurance documents.
Maintain Records
Keep and preserve records for all your insurance policies, such as information about claims, receipts for repairs, medical bills, and more. This will ensure you have all the documentation you need should you have to file or appeal a claim.
Request Written Information
If you’re dealing with denials, don’t give up. You should request information and explanations, and get them in writing so that you have proof.
Continue to pursue your insurer for answers. Being persistent is important to prevent disputes and resolve them before they escalate.
What Steps Should You Take to Deal with an Insurance Claim Dispute?
If you’re in the middle of a claim dispute with your insurance company, there are some important steps to take.
Review Your Policy
The first thing you should do is refer to your insurance policy. Find what it says about your coverage and the claims process. Sometimes the wording in such documents can be challenging to understand, but a policy review is important to ensure you can see your rights in print and understand what is owing to you.
If you need to get your policy legally reviewed, you should post a request for free on ContractsCounsel, an online legal network that connects clients with vetted lawyers for contract review and drafting. A lawyer on the platform will help you understand the policy and explain how you can pursue your claim dispute for the best outcome.
Contact the Insurer
Once you’ve reviewed your insurance policy, you should contact the insurance company to ask questions. If your claim is wrongfully denied, you should request information about the denial. Similarly, if you’re unsatisfied with a claim settlement, you should explain to them why it’s below your expectations or not in line with your policy coverage.
Keep Notes and Communications
You should keep notes about your interactions with the insurance company, down to emails, texts, and letters. When you have a record of all important documentation regarding your policy and dispute, you'll be able to reference it in future, if required.
Consult with a Lawyer
Hiring a lawyer from ContractsCounsel is worth doing as they will help you deal with the insurance claim dispute. These situations can be challenging or confusing, especially if you’ve never dealt with them before or your insurer isn’t responsive to your claim requests.
A lawyer can assist you in various ways throughout the claim dispute process, such as by:
- Reviewing your insurance policy
- Investigating your case to see if it’s valid
- Exploring your options for resolving the dispute
- Communicating with the insurer on your behalf
- Negotiating with your insurer to receive a fair claim or settlement
- Helping you file an appeal with your insurance company
- Gathering all the necessary documents to strengthen your case
- Pursuing legal options, such as lawsuits, if you’re dealing with an insurer who refuses to cooperate or who is operating in bad faith
What Legal Remedies are There For Insurance Claim Disputes?
Your lawyer can assist you with pursuing legal remedies for your specific insurance claim dispute. This can include the following.
Appealing the Denial
If you’re dealing with a denied claim, your insurance company will usually have an internal process you can use to appeal their decision. To appeal, you’ll have to submit a letter explaining reasons why you think their appeal is incorrect.
Your lawyer can help you with drafting the letter so that it’s legally sound and includes all the information required, as well as supporting documents.
Filing a Complaint with the State
Depending on the nature of your dispute, your lawyer might suggest reporting a complaint to your state’s insurance department, such as if your insurance company is refusing your appeal.
Consider Alternative Dispute-Resolution (ADR) Methods
It’s common for insurance disputes to be resolved through mediation or arbitration. This is because taking the dispute to court is a last resort, due to its high cost and lengthy duration.
- Mediation involves hiring a neutral, third-party mediator to oversee communications between you and the insurer. It encourages you both to come up with a solution to the problem so that you can resolve the issue yourselves.
- By comparison, arbitration is when you hire a neutral, third-party arbitrator to consider both parties’ cases and evidence, and then decide on a resolution to resolve the issues.
Your lawyer can advocate for you in both ADR processes. Check your insurance policy for any information about dispute-resolution processes that should be adopted if a disagreement comes up.
Do you need an insurance claim dispute lawyer?
If you’re dealing with an insurance dispute or the situation is escalating, you should contact a lawyer on ContractsCounsel. All lawyers are professional and vetted on the platform, providing you with expertise and skill to help you navigate insurance disputes with ease.
