What To Do if Your Car Insurance Claim is Denied in Chicago, IL
After a car accident in Chicago, you expect insurance companies to cover your damages—whether it’s your policy or the at-fault driver’s insurance. However, insurance claim denials are common, and you may be left struggling with medical bills, car repairs, and lost wages.
At Staver Accident Injury Lawyers, P.C., our Chicago car accident attorneys understand how frustrating insurance disputes can be. If your claim was denied, you may have options to appeal, negotiate a settlement, or file a lawsuit. Call us today at (312) 236-2900 for a free consultation.
Why Was My Insurance Claim Denied?
When an insurance company denies a claim, it must provide a reason. Common reasons include:
- Disputed Liability – The insurer claims **their policyholder was not at fault**, or **your injuries were pre-existing** and not caused by the accident.
- Policy Exclusions – Some **types of accidents** or damages **may not be covered** under the policy (e.g., intentional acts, “act of God” exclusions).
- Lapsed Policy – If **premiums weren’t paid**, the **policy may have been inactive** at the time of the accident.
- Failure to Notify – If the **policyholder failed to report the accident** in time, the insurance company might **refuse to investigate or pay**.
If your insurance claim was wrongfully denied, you have the right to challenge it.
What Happens If an Insurance Company Denies a Third-Party Claim?
If you were in an accident and the at-fault driver’s insurance refuses to pay, you may have to file a lawsuit to recover damages. Insurance companies are not required to approve every claim—they will investigate liability and may try to avoid paying by shifting blame.
If your insurer denies a third-party claim against you, the other driver could sue you directly. Your insurance company must defend you, but they may also refuse to settle—leaving you exposed to personal financial liability.
To protect yourself, you may need an independent attorney to evaluate whether your insurance provider is acting in bad faith.
Insurance Companies Must Act in Good Faith
Insurance companies are legally required to act in good faith when handling claims. Under Illinois law, insurers must fairly investigate accidents, pay valid claims, and avoid deceptive tactics.
If an insurance company unfairly denies or delays your claim, they may be acting in bad faith. Examples include:
- **Misrepresenting policy terms** to deny coverage
- **Delaying claim investigations** without justification
- **Refusing to negotiate or settle when liability is clear**
- **Denying claims without a reasonable explanation**
- **Offering an unfairly low settlement** that doesn’t cover your damages
If your insurance company violated the law, you may be able to file a bad faith insurance claim against them under Illinois Insurance Code Section 154.6.
How to Appeal a Denied Car Insurance Claim
If your insurance claim was denied, you don’t have to accept it. You can file an appeal with the insurance company, but having an attorney on your side significantly increases your chances of success.
Steps to appeal your denial:
Consult an Attorney
If you have been navigating the insurance claims process by yourself so far, it is time to hire an experienced personal injury attorney like those of Staver Accident Injury Lawyers, P.C. A denial means you have weeks or months to of negotiations to go before you might receive a reasonable settlement offer. Your insurance company will work to uphold its denial. You need a lawyer experienced in this situations to help you overcome this setback.
Learn Why Your Claim was Denied
An insurance company will usually inform you of why your claim was denied. But if there is any confusion or doubt as to the reason behind the denial, ask the insurer to provide the denial reasons in writing. You cannot properly fight the denial if you do not understand its basis.
Review Your Policy
There are many valid reasons for an insurance company to deny a claim. It is important to review your policy to make sure the insurance company’s reason was valid or possibly an act of bad faith.
Make a Formal Appeal
You and your attorney have the right to formally appeal the insurer’s decision. By law, the denial letter should contain information on how to specifically go about this, which is usually a formal letter asking for internal reconsideration. Your appeal should include documentation and evidence supporting your claim. It is important to follow the insurance company’s process, otherwise, your appeal may not get anywhere or take longer than it should be reviewed.
Appeal to the Illinois Insurance Commissioner
If you believe your insurance company has broken the law in relation to your claim, you can file a complaint with the Illinois Department of Insurance. This is a confidential process.
File a Bad Faith Suit Against the Insurance Company
If the insurance company refuses to approve your claim and uphold the policy, you may have the right to take the insurer to court based on unfair or deceptive trade practices. An insurer acting in bad faith when denying your claim may be breaking the law. If you win this type of case, you will receive your settlement as well as additional damages from the insurer.
Our Chicago car accident lawyers can handle the appeals process for you, ensuring that insurance companies play fair.
When to Sue for a Denied Insurance Claim
If your claim denial is unjustified, you may be able to sue the insurance company for damages. This is especially true if:
- The **insurance company ignored clear evidence** of liability.
- The **denial violated state insurance laws**.
- The **insurer refused to negotiate in good faith**.
- The **company failed to conduct a proper investigation**.
If your insurance provider acted in bad faith, you may be entitled to additional compensation beyond your original claim.
Contact Our Chicago Insurance Attorneys Today
At Staver Accident Injury Lawyers, P.C., we fight for policyholders and accident victims dealing with wrongfully denied claims. Whether you need to appeal an insurance denial, negotiate a settlement, or sue for bad faith, our Chicago car accident attorneys can help.
We serve clients throughout Chicago, Aurora, Elgin, Hinsdale, Joliet, Naperville, and Waukegan.
Call (312) 236-2900 or use our online contact form for a free case evaluation.
