How to Dispute a Car Insurance Claim

Car insurance claims are often difficult to deal with when they’re denied. It’s important to know what to do if you’re denied coverage or your claim has been rejected.

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UPDATED: May 23, 2022

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Written By: Laura BerryReviewed By: Joel OhmanUPDATED: May 23, 2022Fact Checked

Here's What You Need to Know

  • Determine why your insurer denied your claim so you can accurately appeal the decision
  • To dispute a car insurance claim, you may need to provide relevant evidence to your insurer
  • Insurance companies can deny claims if you do not carry the proper coverage, if an excluded driver was behind the wheel, or if you filed false information

It may feel like a whirlwind if you’ve recently been in a car accident. Taking care of everything after an accident can be stressful and overwhelming. But what if your claim for auto insurance coverage gets denied by your insurance company? Is there a way to dispute an insurance claim?

Fortunately, you can dispute and appeal decisions made by your car insurance company regarding any insurance claims you file. However, to get your insurer to change its mind, you may need to provide sufficient information and evidence that your policy should cover the accident.

Read on to learn some tips for disputing car insurance liability decisions and then enter your ZIP code in our free tool to start comparing car insurance to get affordable car insurance quotes so you hopefully won’t find yourself needing to appeal a car insurance claim.

Can I dispute an insurance claim?

Insurance companies allow policyholders to dispute claims. However, it’s the policyholder’s responsibility to learn why their insurer denied the claim before appealing the decision.

To understand why your insurance company denied your claim, you must read your claim denial or settlement offer letter. This letter will explain how the company came to a specific decision, and it should allow you to understand what you’ll need to prove or disprove to change the outcome.

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How can I dispute an auto insurance claim?

Once you know why your insurance company denied your claim, the first step is to collect the necessary information and evidence to prove the company should cover your claim.

If you were in an accident and the police filed a report, you can request a copy of the accident report. If you’re at fault, attempts to dispute your insurance claim could be more complicated, depending on the insurance type you carry.

You should review your insurance policy to determine how your coverage level may impact your company’s decision. You should also be able to find a bill of rights testament on your insurance company’s website, which will explain your rights when it comes to appealing a claim.

Take a look at this table to see the average rates for various coverage types across the country.

Average Annual Full Coverage Auto Insurance Rates by State
StatesAverage Annual Full Coverage Rates
Idaho$673.13
Iowa$683.67
Maine$689.12
Wisconsin$716.83
Indiana$728.93
South Dakota$744.28
Vermont$746.79
Ohio$766.66
North Dakota$768.09
North Carolina$768.28
New Hampshire$795.50
Nebraska$805.99
Virginia$836.14
Alabama$837.09
Wyoming$844.33
Missouri$845.39
Kansas$850.79
Utah$852.66
Illinois$854.10
Tennessee$855.56
Minnesota$856.62
Hawaii$858.16
Montana$868.55
Oregon$894.10
Arkansas$900.18
Kentucky$917.49
New Mexico$920.42
South Carolina$936.69
Colorado$939.52
Pennsylvania$950.42
California$951.75
Washington$952.10
Mississippi$957.59
Arizona$961.88
Countrywide$981.77
Oklahoma$985.58
Georgia$991.25
West Virginia$1,032.45
Alaska$1,050.09
Texas$1,066.20
Nevada$1,083.42
Maryland$1,096.37
Massachusetts$1,107.76
Connecticut$1,132.78
Florida$1,208.77
Delaware$1,215.69
Rhode Island$1,257.40
District of Columbia$1,324.39
New York$1,327.82
Louisiana$1,364.17
New Jersey$1,379.20
Michigan$2,611
Average$1,943.80
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The rates in this table are averages to help you form a baseline expectation of what you could be paying in your state, but your personal situation, age, credit score, driving history, etc. will affect your exact rates.

What is an appeal letter for an insurance claim?

Once you’ve done your research and determined how you’ll dispute your insurance company’s decision, the next step is to write an appeal letter telling your company why its denial of your claim was incorrect.

Most insurance companies require policyholders to submit any appeals to claim decisions in writing. You have the option of doing this on your own, but you can also hire an insurance attorney to help you.

While hiring an attorney could be costly, it could be the right decision, especially if you’re disputing a claim denial of thousands or tens of thousands of dollars.

Your appeal letter is a simple statement explaining why your claim for coverage should be accepted. However, you may need to cite specific evidence to support your conclusion in the letter.

Once your letter is ready, you will submit it via certified mail or email to your company. Check with a representative of your insurance company to determine how you should submit your appeal letter.

Why do insurance companies deny claims?

Though you might be convinced your insurance company should accept your claim, there are many reasons insurance companies deny policyholders’ claims.

The most prevalent reason for claims denial involves auto insurance coverage. For example, suppose you were driving and caused a car accident. If you only carry liability coverage and file a claim to repair your vehicle, an insurer will deny your claim since liability only pays for damage to the other driver’s vehicle. You must carry collision coverage to cover damages to your vehicle.

Some insurance companies don’t cover other people when they drive your car. So before lending your vehicle to a friend, family member, or neighbor, read the fine print of your policy to discern whether your insurance company considers people not named on your policy to be excluded drivers.

Lastly, your insurance provider will deny your claim if you are dishonest. For example, some companies deny claims if a person was in an accident while driving for work-related reasons but told the insurance company they did not use their vehicle for business use.

More severe examples of dishonesty — such as filing a false claim — can get individuals into trouble. For instance, there may be an investigation if your insurance company believes you committed auto insurance fraud, depending on the claim and amount of money at stake.

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Should I file a lawsuit to dispute my insurance claim?

If you wrote an appeal letter sufficiently proving your claim should be accepted, and your insurer refuses coverage, you may want to consider filing a lawsuit.

Lawsuits are timely and costly, so ensure your claim acceptance is worth the effort before suing your insurance company. You will also need to familiarize yourself with your state’s statute of limitations.

A statute of limitations is a law dictating the maximum amount of time an individual has to file a lawsuit from the date of the incident. The statute of limitations for personal injury and property damage claims varies from one state to another.

The table below shows each state’s statute of limitations.

Statute of Limitations by State
StatePersonal Injury Statute of LimitationsProperty Damage Statute of Limitations
Alabama2 years2 years
Alaska2 years6 years
Arizona2 years2 years
Arkansas3 years3 years
California2 years3 years
Colorado3 years3 years
Connecticut2 years3 years
Delaware2 years2 years
Florida4 years4 years
Georgia
2 years4 years
Hawaii2 years2 years
Idaho2 years3 years
Illinois5 years2 years
Indiana2 years2 years
Iowa2 years5 years
Kansas1 year2 years
Kentucky1 year2 years
Louisiana1 year1 year
Maine6 years6 years
Maryland3 years3 years
Massachusetts3 years3 years
Michigan3 years3 years
Minnesota2 years6 years
Mississippi3 years3 years
Missouri5 years5 years
Montana3 years2 years
Nebraska4 years4 years
Nevada2 years3 years
New Hampshire3 years3 years
New Jersey2 years6 years
New Mexico3 years4 years
New York3 years3 years
North Carolina3 years3 years
North Dakota6 years6 years
Ohio2 years2 years
Oklahoma2 years2 years
Oregon2 years6 years
Pennsylvania2 years2 years
Rhode Island3 years10 years
South Carolina3 years3 yearas
South Dakota3 years6 years
Tennessee1 year3 years
Texas2 years2 years
Utah4 years3 years
Vermont3 years3 years
Virginia2 years5 years
Washington3 years3 years
Washington D.C.3 years3 years
West Virginia2 years2 years
Wisconsin3 years3 years
Wyoming4 years4 years
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Research your state’s statute of limitations to ensure you still have time to initiate legal action.

Before suing your insurance provider, consult an insurance attorney who can help you decide how likely your insurance company will cover your claim and whether a lawsuit is worth it. 

How to Dispute a Car Insurance Claim: The Bottom Line

In some cases, disputing a claim decision made by your insurance company can be a straightforward process. You need to know why your insurer denied your claim, gather evidence to support your perspective, and submit an appeal letter to your insurance company.

If your company decides to cover your claim, you should not have to do anything else. However, if your insurance company continues to deny your claim, you may want to consider suing your insurance provider. 

Before considering any legal action, you should speak with an insurance attorney.

To see how you can save on car insurance so you have the coverage you need so you hopefully won’t ever find yourself disputing a car insurance claim, type your ZIP code into our free tool now.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

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