Can Car Insurance Refuse to Pay a Claim?

Florida recorded an average of 1,082 car crashes daily in 2023, with over 679,482 drivers involved in car accidents that year. The total number of crashes included 3,375 with fatalities, 15,399 with incapacitating injuries, and over 236,886 with other injuries. 

In total, 252,285 people were injured in car accidents in the state that year. 

When you’re injured in a car accident, you aren’t thinking about accidents being commonplace. You’re thinking about who will pay for your medical bills and other accident costs, such as vehicle repairs. Although Florida is a no-fault state, you can seek compensation from the at-fault driver’s car insurance company.

However, even if you have grounds for damages, the insurance company may refuse to pay your claim. Car insurance company can refuse to pay a claim under certain circumstances. Common reasons include policy lapses, liability disputes, insufficient evidence, or allegations of fraud. Some refusals may also constitute insurance bad faith, where the insurer avoids its contractual obligations to protect profits.

In that case, your car accident attorney can help you appeal or file a lawsuit and negotiate a fair settlement. 

Reasons the Other Driver’s Insurance Company May Try to Refuse Your Claim 

Dealing with insurance companies is challenging. Accident victims may find it time-consuming, stressful, and frustrating, particularly if they’re also coping with severe injuries. Insurance companies try to minimize their expenses after a claim and find ways to avoid paying. Some reasons they may deny a claim include the following:

• Liability disputes: Drivers must act in a reasonable manner to ensure the safety of others while operating a motor vehicle. Drivers who fail to demonstrate reasonable care and cause an accident can be found negligent. Negligence establishes the driver’s liability. However, insurance companies may dispute liability, particularly if multiple at-fault parties exist.
• Policy limits: All Florida drivers must have no less than $10,000 personal injury protection (PIP) insurance and $15,000 property damage liability (PDL) insurance. The insurance company may deny the claim if the driver’s insurance policy isn’t enough to cover the damages. 
• Pre-existing conditions: Car insurance companies can use evidence you had pre-existing medical conditions to argue their client isn’t liable for your medical bills
• Uninsured motorist: Suppose the at-fault driver recently let their coverage lapse. In that case, the insurance company will deny the claim because the driver didn’t have an active insurance policy. 
• Waived rights: Insurance companies may try to get victims to accept responsibility for the accident or waive their right to seek compensation

Why Do Insurance Companies Deny Claims?

Insurance companies deny claims for many reasons:

• Lack of coverage or expired insurance policy – Claims are often denied when the incident falls outside the scope of the policy or if the insurance coverage has lapsed due to non-payment or expiration.
• Administrative errors or incomplete documentation – Missing forms, incorrect details, or clerical mistakes can lead insurers to reject claims, emphasizing the importance of accurate paperwork and thorough documentation during the submission process.
• Delayed medical treatment after the accident – If medical care is not sought promptly, insurers may argue the injuries were not serious or unrelated, using delays as justification to deny compensation for treatment costs.
• Misrepresentation or fraud allegations – Claims may be denied if insurers suspect false statements, exaggerated damages, or fraudulent intent, even when misunderstandings or minor inconsistencies trigger suspicion of dishonesty.
• Failure to notify the insurer promptly – Policies often require immediate reporting of incidents. Delays in notifying the insurer can give them grounds to deny claims, citing breach of policy terms and conditions.
• Bad faith tactics: delay, deny, or defend – Some insurers intentionally stall claim processing, reject valid claims, or aggressively defend against payouts, prioritizing profit over fairness and leaving policyholders frustrated and financially strained.

Some denials are legitimate, but others may reflect bad faith tactics like delay, deny or defend.

Insurance Bad Faith and Your Rights

Insurers are legally required to act in good faith. If an insurance company refuses to pay a valid claim without justification, you may file a bad faith lawsuit. This can recover damages beyond your original claim including legal fees and punitive damages. Florida law also prohibits unfair trade practices, ensuring policyholders are protected.

What Should I Do if the Insurance Company Denies My Claim? 

You should take certain steps if the at-fault driver’s insurance company tries to avoid paying damages for your accident claim.

1. Learn the Reason for the Denial

The insurance company will issue a denial letter explaining why they denied your claim. Clarify the reason in the letter, as it could affect your options. Request a detailed explanation in writing.

2. Communicate With the Insurance Company

It’s best to hire a car accident attorney and let them communicate with the insurance company. Your attorney understands how insurance companies work and their tactics to avoid paying claims. Your attorney will review the denial letter and your insurance policy documents, confirm why the claim was denied, and explain your options.

3. Gather Records and Other Evidence of the Car Accident

Receiving a car accident claim involves proving the at-fault driver’s negligence, making them liable for damages. Your lawyer will conduct an accident investigation and collect relevant evidence, such as traffic cam footage, the police report, and witness statements. Your attorney will begin building your legal case and use this evidence to justify your claim.

4. File an Appeal or Lawsuit

Your attorney can use the evidence gathered to support an appeal of the insurance company’s denial. They will file a formal appeal letter. Your attorney can also explain whether you should file a lawsuit for damages now. In most cases, Florida gives car accident victims 24 months to file a lawsuit. Your attorney may advise filing a lawsuit instead of waiting for an appeal if the filing deadline is approaching.

5. Let an Attorney Help Calculate Your Damages

Consider legal action if the insurer refuses to act in good faith. Your attorney will help you calculate the total damages you can seek. Your grounds for damages may include the following:

• Economic damages: These damages include reimbursement for costs incurred because of your accident and can include:
  • Childcare bills
  • Funeral and burial costs
  • House cleaning expenses
  • Job retraining bills
  • Lost income
  • Medical bills
  • Personal care aide costs
  • Property repair or replacement costs
  • Transportation expenses

• Non-economic damages: These damages address the mental, physical, and personal suffering you’ve endured because of your accident. Grounds for non-economic damages include:
  • Anxiety
  • Depression
  • Grief
  • Loss of intimacy
  • Loss of quality of life
  • Pain and suffering
  • Post-traumatic stress disorder (PTSD)
    
• Punitive damages: Some accident victims can seek punitive damages if the at-fault driver who caused their accident is guilty of gross negligence. Suppose you were driving in a residential area and struck by a driver involved in a street race, driving at four times the posted speed limit. Your attorney can argue they knew their actions posed a high risk of harm to others and ignored that fact, making them guilty of reckless endangerment and liable for punitive damages.

6. Negotiate Your Settlement

Your attorney can pursue mediation or arbitration to negotiate a settlement with the insurance company, aiming to reach a settlement offer that’s fair by presenting evidence, countering objections, and avoiding lengthy courtroom litigation.

Dealing With Insurance Companies Is Best Left to an Attorney; Call Bernstein & Maryanoff Injury Attorneys Today

Coping with an accident can be confusing, overwhelming, and even frightening. Insurance companies often try to minimize payouts or deny claims altogether, leaving victims unsure of their rights. That’s why having experienced legal representation is critical.

At Bernstein & Maryanoff Injury Attorneys, we understand the tactics insurers use and know how to fight back. Our team will stand by your side after your Miami car accident, handling the complex negotiations and legal hurdles so you don’t have to.

With decades of experience, we’ll use our legal expertise to protect your interests and pursue the maximum compensation available under the law. You deserve every penny for your medical bills, lost wages, and pain and suffering — and we won’t stop until justice is served.

Frequently Asked Questions (FAQs)