What to do when a claim is denied

A denial is not a verdict. It is a decision made by a person applying a contract to a set of facts, and either half of that can be wrong. Before you argue, work out which half you think is wrong, because the two require completely different responses.

Start with the written reason

Insurers are required to tell you why. If what you have is a phone call, ask for the denial in writing with the specific policy provisions it relies on, quoted and identified by section. That single request does several things at once: it forces the reason to be specific, it creates a document you can check against the policy, and it starts the clock on the appeal rights that come with a formal decision.

Read the cited provisions in the policy itself rather than in the letter’s paraphrase. Paraphrases drop qualifiers, and the qualifier is often the argument.

Identify which kind of denial it is

A factual dispute

The insurer believes something happened differently from how you describe it: the cause of the damage, when it began, what condition the property was in, who was driving. Evidence settles this, not argument.

A coverage interpretation

Everyone agrees on what happened, and the disagreement is about whether the policy covers it. An exclusion, a definition or a sublimit is being read a particular way. This is settled by reading the contract and, if necessary, by someone else reading it.

A procedural denial

The claim failed a condition rather than a coverage: notice given late, documentation missing, a form unsigned, an examination not attended, repairs made before inspection. These are the most often fixable, and sometimes the fix is simply doing the thing.

An eligibility or timing denial

The loss falls outside the policy period, inside a waiting period, or is treated as arising from a condition that predates the coverage.

An administrative error

The wrong policy was checked, a coverage that was added by endorsement was not seen, a payment was misapplied. This is more common than it sounds and is usually resolved by pointing at the declarations page.

Build the file before you appeal

Every stage after this one goes better with a complete file, and the file is easiest to assemble now.

• The full policy in force on the date of loss, including every endorsement, and the declarations page.
• The claim number, the date of loss, the date you gave notice and how.
• The written denial and every letter, email and portal message exchanged.
• A dated log of phone calls with names, and what was said.
• Photographs, video, receipts, invoices, medical or veterinary records, police or incident reports.
• Independent assessments: a contractor’s estimate, a mechanic’s report, a treating professional’s opinion.
• Anything the insurer relied on. Ask for the adjuster’s report, the engineer’s report or the estimate that supports the denial.

Do not dispose of damaged property until the claim is finished. It is evidence, and its absence tends to be read against the person who needed it.

The escalation ladder, in order

1. Internal appeal. Write to the insurer, cite the provision it relied on, state why it does not apply or why the facts differ, and attach the evidence. Ask for a written response by a date. Most reversals happen here, because most denials that are wrong are wrong on a fact the insurer did not have.
2. Supervisor or claims manager review. If the appeal is refused without engaging with your evidence, ask for review by someone other than the original decision-maker.
3. Appraisal or other clause in your own policy. Many property policies contain an appraisal provision for disputes about the amount of a loss, where each side appoints an appraiser and an umpire decides. It resolves amount disagreements, not coverage ones, and invoking it has consequences, so read the clause before using it.
4. Your state insurance department. The regulator that licenses the insurer takes consumer complaints, requires the company to respond, and reviews conduct. The NAIC directory of state insurance departments lists the office for your state. A regulator will not order payment on a contract dispute, but a complaint frequently produces a more careful second look, and conduct issues are exactly its remit.
5. Mediation, arbitration or a public adjuster. Some states offer mediation programs for particular kinds of loss. A licensed public adjuster works for you rather than the insurer and is paid from the settlement, which is worth weighing.
6. An attorney. Where the amount justifies it, or where the insurer’s conduct rather than the coverage is the problem. Be aware that time limits apply to suing on a policy, and they are set by the contract and by state law.

Deadlines quietly decide many of these

Three separate clocks run at once: the deadline in the policy for filing suit or for completing repairs, the appeal window stated in the denial, and the period your state allows for a complaint or for legal action. They are not the same length and they do not start on the same day. Find all three and write them down at the beginning, because the strongest argument is worth nothing after the date it had to be made.

How to write the appeal letter

Short, factual, and organized around the provision they cited. State the claim number and date of loss, quote the provision, state precisely why it does not apply or which fact is wrong, list the enclosed evidence, and ask for a written decision by a specific date. Do not argue about fairness, do not speculate about motive, and do not include anything you cannot support. An appeal that reads like a file note gets treated like one.

Send it in a way that produces a record, and keep a copy of everything you send.