Your Insurance Claim Was Denied: What to Do Next

A claim denial is frustrating when you paid your premiums and filed your claim. A denial is often not the final word. Many decisions can be reconsidered, corrected, or appealed. Here is a practical plan for what to do next.

Start with the denial letter

Before you pick up the phone, read the letter from start to finish and look for three things:

• The reason for the denial. Common examples: the loss is excluded, information is missing, or the claim was filed late.
• The policy language the insurer relies on to support its decision.
• Appeal instructions and deadlines. Write those dates on your calendar right away.

If the letter is vague or doesn't clearly explain the reason, you can ask the insurer for a written explanation of the denial. Montana's unfair claim settlement practices law requires insurers to give a reasonable explanation of the basis for a denial.

Get the full policy and your claim file

Many people only have the declarations page, the short summary of their coverage. To understand a denial, you need the complete policy, including exclusions and endorsements. Request it in writing.

You can also ask for a copy of your claim file: adjuster notes, expert reports, photos, and any documents the insurer used to reach its decision. Comparing the claim file against the policy often uncovers mistakes or gaps.

Build a paper trail

From this point on, keep an organized record. It will help with an appeal and, if needed, with a lawsuit.

• Save every letter, email, and text from the insurer.
• After each phone call, note the date, time, the person's name, and what was said.
• Keep receipts, invoices, repair estimates, and medical records.
• Take dated photos of the damage or injury.

Whenever possible, communicate in writing. What is written down is far easier to prove later.

Watch the deadlines

Every policy and claim type has its own deadlines. Some apply to the insurer's internal appeal process, and others are legal limits on when you can file a lawsuit. Deadlines vary depending on the type of insurance and your circumstances, so check with an attorney if you are not sure which one applies to you.

The key is not to wait. A late appeal can lose ground even when your arguments are strong.

File an internal appeal

Most insurers offer an internal review. A solid appeal usually includes:

• A clear letter identifying the claim and explaining why the denial is wrong.
• References to the policy provisions that support your position.
• New or additional evidence, such as medical reports, estimates, or photos.
• A request for a written response.

Send it in a way that confirms delivery, and keep a copy of everything you submit.

Warning signs of bad faith

Insurers have a duty to treat their policyholders fairly, and Montana law prohibits certain unfair claim-handling practices. Red flags include:

• Long, unexplained delays or no response to your calls and letters.
• A denial issued without a reasonable investigation of the facts.
• Lowball offers that don't match your documented loss.
• Pressure to accept a quick settlement or sign papers you don't understand.
• Readings of the policy that contradict its plain language.

None of these signs proves bad faith on its own, but any of them is a good reason to have a lawyer take a look.

When a lawsuit makes sense

If the internal appeal doesn't fix the problem, it may be time to consider legal action. An attorney can review the policy, the claim file, and the insurer's conduct to decide whether there is a basis for a breach of contract or bad faith claim.

Every case is different. Sometimes a letter from a lawyer is enough to get the insurer to take a second look. Other times, going to court is the only way forward.

Talk to us

If your insurer denied your claim and you are not sure where to turn, we can help you make sense of your policy and your options. We offer a free, confidential consultation in English or Spanish. Bring your denial letter, and we will go over the next steps together.