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What Happens When the Insurance Company Refuses to Pay My Car Accident Claim?

Legally Reviewed and Edited by: Terry Cochran

What happens if car insurance denies my claim is a common question for those involved in vehicle collisions in Michigan. Insurance is a vital component of driving in the state, offering financial protection and peace of mind for drivers on Michigan roads.

However, despite the benefits of insurance, disputes regarding benefits and payouts often occur after a car accident between policyholders and their insurers. When you file a claim after a car accident, you expect your insurance company to cover your damages under your policy. Unfortunately, insurers sometimes refuse to pay a car accident claim, leading to frustration and financial hardship.

Knowing what happens if car insurance denies my claim and having a skilled car accident attorney from Cochran, Kroll, & Associates, P.C. can help you negotiate with insurers and receive the compensation you deserve.

Insurance Company Responses When a Claim is Filed

After an accident, you will file a claim for compensation with your insurer or through the third-party insurance company of a negligent driver. Once the insurance company receives your claim, they may issue one of several responses:

Acceptance of Claim

The insurance company accepts the claim and agrees to provide coverage for the damages incurred in the accident. While this is ideal, it is often not the case. Most insurance companies will not agree to pay the initial settlement demand and, instead, try to negotiate a lower settlement with you.

Partial Acceptance

The insurance company may accept part of the claim and deny coverage for certain damages or expenses. For example, they may cover the cost of car repairs but not the cost of a rental car. Understanding your policy is critical when filing a claim; if you know what your coverages are, you can more easily recognize when an insurer is making a good or bad faith denial.


The insurance company may conduct an investigation to gather additional information or evidence related to the claim. This may delay the processing of the claim but can help ensure that the company makes an informed decision. Under Michigan’s consumer rights laws, most companies have 30 days to investigate and communicate their acceptance or denial of a claim.


The insurance company may make a counteroffer to the policyholder, proposing a different amount of compensation than what was initially requested. Generally, this counteroffer is much lower than what you deserve after an accident. Insurers are concerned with their bottom line, meaning they won’t pay you the full amount you’re owed unless you have strong evidence and legal representation.


The insurance company may deny the claim, citing a lack of evidence, policy exclusions, coverage limits, or other reasons. A claim denial allows the insurer to avoid paying your claim, and if done in good faith, means they believe your claim is not supported under the current information. Unscrupulous insurers may try to deny your claim in bad faith by not covering you even though your claim is applicable under your own or the third-party policy.

While a denied claim is frustrating and requires additional work on your end, you can take action to appeal the decision. For instance, you can hire a skilled attorney to review your policy, communicate with the insurer about the denial, and build a case to appeal. If the insurer refuses to pay, your attorney can also help you file a lawsuit in which the court system will decide the outcome.

Reasons Car Insurance Companies Deny Claims

What happens if car insurance denies a claim? While car insurance is meant to provide financial protection after an accident, there are various reasons why insurance companies may reject a claim. These typically include insufficient evidence, policy exclusions, coverage limitations, and unapproved treatments after a crash.

Insufficient Evidence

Insurance companies require evidence to support a car accident claim. Sufficient evidence is necessary because it helps establish the validity and credibility of your claim. Insurance companies rely on evidence to assess the extent of damage, determine liability, and prevent fraudulent claims. The insurance company may deny your claim if the evidence is insufficient or inconsistent.

Adequate documentation, such as photographs and videos, police reports, witness statements, and medical records, provides a clear and objective account of the incident. This enables the insurance company to make fair and accurate decisions.

Without proper evidence, the insurer may not have a strong basis to support the claim, leading to denials or delays in the claims process. Insurance companies rely on tangible proof to assess the validity of claims, making it necessary for you and your attorney to gather all necessary documentation and evidence to support your case.

Policy Exclusions

Insurance policies may contain exclusions for certain types of damages or incidents. For example, a policy may exclude coverage for intentional acts or driving under the influence of drugs or alcohol.

If your claim falls under an exclusion in the policy, it will be denied. For example, if you are hurt in an accident where any of the following apply, you are disqualified from receiving PIP insurance benefits:

  • You were willingly driving a stolen vehicle and knew it was stolen
  • You owned or registered a vehicle involved in the accident but didn’t have the required insurance
  • You weren’t a Michigan resident unless you owned a registered and insured vehicle in the state
  • You were driving a vehicle and were specifically listed as an excluded driver
  • You owned or drove a vehicle that had specific coverage excluded according to a policy rule

Coverage Limits

Insurance policies often limit the amount of coverage provided for specific types of damages, such as property damage or medical expenses. The insurance company may deny the excess portion if the claim exceeds these coverage limits.

  • PIP insurance: In Michigan, you will file for medical and lost wage benefits through your PIP insurance, no matter who is at fault. PIP coverage limits may be as low as the $50,000 minimum or up to unlimited, depending on what option you select when signing up for a policy.
    Within your policy, there may be specific coverage limits. For example, claimants can only receive up to $20 a day in replacement services, up to 85% gross pay, and up to $5,000 in funeral expenses.
  • Third-party claims: If your injuries exceed your PIP coverages, you can file a third-party claim with the other driver’s liability insurance. This allows you to obtain higher compensation for more serious injuries that meet the state’s serious injury threshold.
    However, you can still only obtain a settlement within their policy limits. If they have the state minimum of $50,000 for one person injured or killed and $10,000 for property damage, your claim will be limited to these amounts. Any excess compensation will be denied.

Unapproved Repairs or Medical Treatments

Michigan car insurance companies may deny claims for unapproved repairs or medical treatments. Insurance policies often specify approved repair facilities and treatment providers to ensure quality and cost control. Deviating from these approved options may result in claim denial.

For example, PIP insurance in Michigan specifies that it pays for “allowable expenses” for policyholders after an accident. According to Michigan statute 500.3107, this includes all reasonable charges for accommodations, services, and products necessary for an injured person’s recovery, care, and rehabilitation. It excludes excess hospital room charges, funeral services over the $5,000 limit, and medical marihuana use.

Steps to Take If Your Claim is Rejected After an Accident

If your claim is denied, it is not the end of the road for receiving compensation. Knowing what happens if car insurance denies a claim helps you understand what steps to take to appeal the insurer’s initial decision. These steps include the following actions, such as reviewing your policy and speaking with an experienced attorney from Cochran, Kroll, & Associates, P.C.:

Review Your Policy

Reviewing your policy is essential if your claim is denied. Carefully go through your insurance policy to understand the coverage provided, any exclusions, and specific requirements. This helps you determine if the denial is valid or if there are grounds for disputing it.

You can work with your attorney from Cochran, Kroll, & Associates, P.C. to help you accurately review your coverages. They can ask the insurer for a detailed explanation of the reason for denial, which allows them to address the issue directly and gather relevant evidence to support your case.

Gather Evidence

Gathering evidence is crucial in challenging a claim denial. Collect all relevant evidence, such as police reports, witness statements, medical records, and other documentation supporting your claim. Strong evidence strengthens your position and provides a factual basis for disputing the denial.

Your attorney can help you gather compelling evidence to sway the insurance company’s decision in your favor. For example, our team can work with accident reconstructionists and forensic experts to show how the incident occurred and prove you were not at fault. We can also subpoena phone records and nearby security footage to support your claim.

If your case involves significant injuries, our senior partner attorney, Eileen Kroll, can use her medical knowledge as a former registered nurse to solidify the medical evidence in your claim.

Having worked in one of Detroit’s most high-volume surgical centers, she understands the intricacies of car accident injuries. She will review your case and examine your medical records to correlate your injuries to the car crash, making it difficult for the insurance company to question your claim.

Contact the Insurance Company

If the insurance company denied your claim, contact them and find out the exact reasoning for the denial. While you can deal with the insurance company directly, it may harm your case. The adjuster may use it as an opportunity to get a statement from you which they can use to further support their denial.

For example, if you say “I’m sorry” or express concern for the other driver, they may twist your words to mean that you are at fault. If you make a statement that you “feel fine” or “okay,” they could also use this to support their assertion that your injuries aren’t as bad as you claim, justifying the denial.

Instead, have your attorney discuss the denial and obtain its exact reasoning. They can handle all communication with the insurer to fully understand why your claim was denied and develop a legal strategy to appeal the decision.

File a Complaint

If you cannot resolve the issue with the insurance company, you may consider filing a complaint with Michigan’s insurance commissioner. The insurance commissioner serves as a regulatory authority and can investigate your complaint. If they find evidence of wrongdoing or improper handling of your claim, they may take action against the insurance company.

Filing a complaint demonstrates your commitment to seeking a fair resolution and can put additional pressure on the insurer to reconsider their decision. For example, PIP benefits must be paid within 30 days of submission. If the insurer fails to pay and does not offer a valid reason for denial, you can file a complaint, which could result in a 12% interest rate on overdue payments.

Seek Legal Assistance

As soon as possible after a car accident, seek legal assistance from an attorney from Cochran, Kroll, & Associates, P.C. Our experience in car accident claims allows us to provide you with expert guidance throughout the initial claims process and potential appeals or legal actions.

We can help you gather additional evidence, prepare a strong case, and represent your interests in negotiations or court if necessary. Our legal representation ensures that your rights are protected and increases your chances of a favorable outcome.

Car Insurance Denies A Claim

Legal Options if Your Claim is Denied

When considering what happens if car insurance denies a claim, you may have a few legal options to obtain compensation. The two most common actions are going through the appeals process or filing a personal injury lawsuit.

Appealing the Decision

You may be able to file a formal appeal with the insurance company for a denied claim. When filing a formal appeal for a claim’s denial, you must adhere to the insurer’s specific appeals process.

When filing a formal appeal, you will need to follow your insurance company’s specific appeals process. This usually requires a written explanation outlining why you believe the denial is unfair or incorrect.

It’s important to provide detailed reasoning and support it with supporting documents and evidence. For example, if your claim was denied due to insufficient proof of injuries, you could include medical records, doctor’s statements, and any relevant diagnostic tests to support your case.

Address each point the insurance company raised, clearly explaining how the evidence contradicts their reasoning. Additionally, ensure you submit your appeal within the designated timeframe specified in your policy or by the insurance company to avoid any potential issues with timeliness.

Your attorney can help you with this process, ensuring you have robust documentation and representing you in all insurance company communications.

Filing a Personal Injury Lawsuit

To receive compensation for your injuries, you can also work with your personal injury lawyer from Cochran, Kroll, & Associates, P.C. to file a personal injury lawsuit. A lawsuit becomes necessary when an insurance company denies your claim and you exhaust all other avenues for resolution.

This typically occurs when there is a fundamental disagreement between you and the insurer regarding coverage, liability, or the extent of damages. Unlike the typical claims process, where the insurance company can accept or deny claims, a lawsuit shifts the power to the court. By initiating a lawsuit, you seek a legal judgment to determine the validity of your claim and the compensation you deserve.

A lawsuit can offer several advantages over a standard claim. For instance, litigation allows for thoroughly examining the facts and evidence surrounding your case in a legal setting. This can uncover weaknesses or inconsistencies in the insurer’s denial, strengthening your position. A lawsuit may also motivate the insurer to reconsider their position and offer a fair settlement to avoid the costs and uncertainties of litigation.

If your case makes it to trial, the court will assess the evidence, evaluate applicable laws and policy provisions, and make a binding decision on the outcome of your case. This can give you a fair opportunity to pursue the damages you are entitled to.

These damages can include economic losses for lost current and future earnings, medical bills, rehabilitation, medication, and home modifications. You can also seek non-economic damages in a lawsuit, including emotional distress, pain and suffering, and loss of enjoyment of life.

Get the Compensation You Deserve

If an insurance company has denied your car accident claim, it can be a frustrating and stressful experience. However, it is important to remember that you have legal options.

Whether you file a complaint with the state insurance commission or hire a personal injury lawyer to file a lawsuit, having experienced legal representation can make a difference in the outcome of your case.

At Cochran, Kroll & Associates, P.C., we are dedicated to helping clients who have been injured in car accidents. Our experienced team of personal injury lawyers can provide guidance and support throughout the claims process, and we have a proven track record of success in recovering compensation for our clients.

If you have been involved in a car accident and your claim has been denied, we encourage you to contact Cochran, Kroll & Associates, P.C. for a free consultation. We can help you understand your legal options and recover the compensation you deserve. Reach out to us today to learn what happens if car insurance denies a claim and how we can help.

Our contingency fee basis means we only get paid if we win your case, so there is no financial risk to you to get started. Call our law firm today at 1-866-MICH-LAW and schedule your no-obligation, free case evaluation.

Disclaimer : The information provided is general and not for legal advice. The blogs are not intended to provide legal counsel and no attorney-client relationship is created nor intended.

Alistair MacDonald holds a bachelor’s degree in History and minors in Classics and Economics from Hamilton College. He writes about complex financial and legal topics, explaining them in a reader-friendly way.



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