When an insurance claim is filed, the insurance company has several common defense strategies they may employ to avoid paying out the full amount requested or denying the claim entirely.
As a policyholder in Alabama, it's important to understand these tactics so you can be prepared and protect your rights.
Questioning Claim Validity
One of the first lines of defense for insurance companies is to scrutinize whether the claim is actually valid and covered under the policy terms.
They may request extensive documentation and evidence to prove the claim occurred as described. Lack of proper evidence can result in denial.
Policy Exclusions
Insurance policies are loaded with exclusions , circumstances that are explicitly stated as not being covered.
Insurers will comb through the fine print, looking for any applicable exclusions they can point to as grounds for claim denial or limiting the payout amount.
Examples of common exclusions include:
- Wear and tear;
- Intentional acts;
- Flood/earth movement;
- Nuclear hazards;
- War; and
- Mold.
Even if the general incident seems covered, the insurer may try to classify it under an exclusion to avoid payment.
Questioning Claim Amounts
For approved claims, the insurance company may take issue with the amounts being sought for damages or injuries. Their goal is to pay out as little as possible.
Intense negotiations often ensue between insurers and claimants over the size of settlement offers.
Missed Deadlines
Insurance policies specify strict notification deadlines and filing timeframes for claims. If you miss any of these critical dates, the insurer can use it as justification for denying an otherwise legitimate claim due to the late submission.
Questioning Causation
Insurance companies may dispute whether your stated cause for the incident is actually what triggered the claim situation.
For example, if you claim water damage but they make the argument that it was actually due to earth movement, they can deny your claim by saying it falls under an exclusion.
Blaming the Policyholder
A common tactic is to try to prove the policyholder negligent in some way that either caused or contributed to the claim incident. If successful, this can nullify coverage or reduce payment amounts.
Using the Chicken Feed Strategy
Insurers may approve small, inconsequential parts of a larger claim, which are often referred to as "chicken feed." This allows them to drag out the approval process and delay making decisions on the bulk of the requested compensation.
Independent Medical Exams
Insurers frequently require independent medical exams by doctors they employ for injury claims. Those doctors may provide an assessment that favors the insurer's stance of minimizing or outright denying the claimed damages.
Allegations of Fraud
A surefire way for an insurance company to deny a claim is by accusing the policyholder of fraud. This could involve accusations of deliberately causing an incident, staging details, or falsifying any component of a claim. Insurers make these accusations liberally.
Delay Tactics
Even if an insurance company cannot outright deny a claim, they often resort to delay tactics to avoid making payment.
This includes making endless requests for more documentation, not returning phone calls, requesting redundant information already provided, and finding other ways to drag out the process.
Their philosophy is that the longer they can delay, the likelier it is for claimants to give up out of frustration.
Interpretation of Ambiguous Policy Terms
Much of the language in insurance policies is intentionally vague and open to interpretation. You can be certain the insurance company will interpret any ambiguities in a way that favors their ability to deny a claim or avoid making a significant payout.
How to Protect Yourself
As an Alabama policyholder, you need to be exceedingly careful when dealing with insurance companies on claims.
A few key steps can greatly improve your ability to get proper compensation:
- Read your policy thoroughly and understand all terms/exclusions;
- File claims promptly and meet all deadlines;
- Provide exhaustive documentation and evidence from the start;
- Never admit fault or make statements that could be incriminating;
- Hire an experienced insurance claim attorney to represent you; and
- Do not accept any settlement offer until reviewed by an attorney.
Empower yourself by following these essential steps to safeguard your rights and enhance your chances of securing fair compensation in insurance claims disputes.
Frequently Asked Questions (FAQs)
Get answers to the most frequently asked questions about insurance company defense tactics below.
What Should I Do if My Insurance Claim Is Denied?
If your insurance claim is denied, it's essential to review the denial letter carefully to understand the reasons provided by the insurance company. You may need to gather additional evidence or seek legal advice to challenge the denial effectively.
How Long Do I Have to File an Insurance Claim in Alabama?
In Alabama, the statute of limitations for filing insurance claims varies depending on the type of claim. It's crucial to consult with a legal professional to ensure compliance with the applicable deadlines.
Can I Negotiate With the Insurance Company on My Own?
While it's possible to negotiate with the insurance company independently, seeking legal guidance is often advisable, especially if your claim involves significant damages or complexities. Legal experts can provide invaluable support in negotiating fair settlements.
What Should I Do if the Insurance Company Disputes Coverage for My Claim?
If the insurance company disputes coverage for your claim, it's essential to review your insurance policy carefully to understand the terms and provisions.
Consulting with a legal professional can help you assess the validity of the dispute and explore options for resolution.
How Can I Prove the Extent of Damages in My Insurance Claim?
Proving the extent of damages in an insurance claim often requires thorough documentation, including medical records, repair estimates, and other relevant evidence.
Working with experienced professionals, such as medical experts and adjusters, can strengthen your case.
What Role Does Contributory Negligence Play in Insurance Claims in Alabama?
Contributory negligence laws in Alabama can significantly impact insurance claims, as even minimal fault on the part of the claimant can bar them from recovering compensation.
Understanding these laws and how they apply to your case is crucial for pursuing a successful claim.
Is It Worth Pursuing Legal Action Against the Insurance Company?
Whether it's worth pursuing legal action against the insurance company depends on the specific circumstances of your case.
Consulting with a legal professional can help you assess the viability of legal action and explore alternative options for resolving your insurance dispute.
How Long Does It Typically Take to Resolve an Insurance Claim in Alabama?
The timeframe for resolving an insurance claim in Alabama varies depending on various factors, such as the complexity of the case, the cooperation of involved parties, and the need for litigation. It's essential to remain patient and persistent throughout the process.
Empower Your Claim With Legal Support
If you find yourself battling with an insurance company over a claim in Alabama, it's critical to have professional legal representation protecting your rights.
The seasoned insurance dispute attorneys at Baxley Maniscalco have decades of experience taking on insurance giants and forcing them to pay out claims fairly.
We'll fight aggressively every step to eliminate their underhanded tactics and maximize the compensation you recover.
Contact us today for a free, no-obligation consultation to discuss your situation and how we can assist.