What Should I Do If My Insurance Company Denies a Valid Claim?
If your insurance company denies a valid claim in Alabama, the most important thing you can do is act quickly and strategically: request a written denial, file an internal appeal, and consider legal action if the issue isn’t resolved. You also have the right to file a complaint with the Alabama Department of Insurance or speak with an experienced attorney.
A denied claim can be overwhelming—especially when you’ve paid your premiums, followed the rules, and expected support in return. Whether the issue involves auto, homeowners, health, or life insurance, you have options.
Why Was My Insurance Claim Denied?
Insurance companies in Alabama must provide a reason for denying your claim. Common reasons include:
- Lack of coverage: The claim falls outside the scope of your policy.
- Policy exclusions: Certain events or damages may be excluded by your policy language.
- Missing documentation: The insurer claims you didn’t provide sufficient proof or timely paperwork.
- Misinterpretation of facts: Your account of the event may conflict with the insurer’s findings.
- Clerical errors: Mistakes in claim processing can lead to wrongful denials.
Sometimes, the reasons are valid. But in many cases, insurers act unfairly—using confusing language, delay tactics, or outright misrepresentations to avoid paying.
Step 1: Get a Written Denial and Understand Your Policy
If your claim is denied, request a formal denial letter. This letter must include the policy provisions the insurer relied on and a brief explanation of the facts used to justify the decision.
Carefully compare the denial to your policy. Inconsistencies, vague explanations, or misapplied exclusions could point to an unjustified denial.
Step 2: File an Internal Appeal with Supporting Evidence
Once you’ve reviewed the denial, you can challenge it through your insurer’s internal appeal process. Your insurance policy should outline the steps to take.
What You’ll Need:
- The written denial letter
- A detailed appeal letter responding to each point of denial
- Supporting evidence (photos, invoices, medical records, witness statements, expert opinions)
The appeal must be submitted within the timeframe specified in your policy—typically 30 to 60 days. Keep copies of everything you send and receive.
Step 3: Involving the Alabama Department of Insurance
If you believe your insurer is acting unfairly or violating state regulations, you can file a complaint with the Alabama Department of Insurance. Their Consumer Services Division reviews complaints, assists with disputes, and may initiate investigations if insurance companies engage in deceptive practices.
While the Department cannot force a company to pay your claim, they can apply pressure and uncover patterns of misconduct, which may support your case.
What Is Bad Faith Litigation?
Bad faith refers to an insurance company’s intentional refusal to fulfill its legal duty to act honestly and fairly with policyholders. Under Alabama law, insurers are required to:
- Investigate claims promptly and thoroughly
- Provide clear reasons for denial
- Pay valid claims without unnecessary delay
- Act in good faith during claim resolution
If an insurance company violates these duties, you may be entitled to pursue bad faith litigation—a lawsuit seeking compensation not just for the denied claim but for emotional distress, financial losses, and in some cases, punitive damages.
How Drake Injury Lawyers Can Help
At Drake Injury Lawyers, we understand how devastating it is when an insurance company turns its back on you. Our experienced Birmingham personal injury lawyers helped countless Alabama residents recover compensation after valid claims were wrongfully denied or delayed.
If your insurance claim has been denied, don’t navigate the process alone. Contact us today for a free consultation. We’ll review your case, explain your legal options, and fight to get you the coverage and compensation you’re entitled to.