Insurance companies will send you a coverage denial letter when they believe:
- Their investigation is complete.
- There are no grounds for granting you coverage.
- They will therefore not pay for your damages.
Ask them to put everything in writing.
You have a right to know why the insurance company denied payment for a claim in which you believe there is coverage. With insurance coverage, you have the burden of showing that you had a loss. The burden then shifts to the insurance company to show that the claim is excluded.
- Ask for the specific reason in writing of why you do not have coverage. This sounds easy enough, but many times the insurance company will send you a vague coverage denial letter without giving you the specifics. They will tell you that they cannot afford coverage for your loss at this time. This is because most insurance companies do not want to commit themselves to one reason for denying your claim. Nor do they want the denial letter to be used against them in a court of law.
- Determine the best cause of action. The insurance company must carry a heavy burden of showing that there is no coverage. They must show by a preponderance of the evidence that no coverage exists. This means that any and all information and evidence collected against you for the coverage denial must prove no coverage.
- Remember that an insurance policy is a contract of adhesion. A contract of adhesion is a contract where one party has more negotiation power over the other. When you get an insurance policy, you do not get to strike clauses out or modify the terms. Either you pay a certain premium for certain coverage or you do not get it. You cannot modify the terms of the policy. This means that the insurance company is the stronger party of the contract, which comes with a caveat. The contract or policy must be construed against its drafter (the strong party). Therefore, if the exclusions and conditions of the policy are not crystal clear, or they are ambiguous or vague, they must be construed against the insurance company, thereby granting you coverage.
- Ask a lawyer. Hopefully you can deal with the insurance company yourself and get coverage. However, having insurance companies dispute over coverage can be complex and frustrating. You have more rights than insurance companies will tell you. Insurance companies can sometimes waive their right to give you a coverage denial for all your claims. Only an experienced attorney versed on the subject of insurance can help you overturn such decision.
Tips & Warnings
- If things do not make sense, ask your adjuster until you understand, they have a duty to you;
- Have them put everything in writing. This will help your case later in the claim process; and
- Talk to a local attorney about your specific circumstances. He will be able to give you a better insight if you have coverage.
