What to Do if Your Insurance Claim Is Denied in CA

Getting an insurance claim denial can feel like a punch to the gut. You paid your premiums on time, filed your claim properly, and now you’re facing a rejection letter instead of the financial relief you counted on.

No matter if you’re dealing with an auto accident, property damage, personal injury, or health-related claim, a denial doesn’t have to be the final answer. California law gives policyholders several ways to fight back against unfair decisions.

In this article, we’ll walk you through why claims get denied, how to respond, and what options you have to recover the compensation you’re entitled to.

Why Do Insurance Companies Deny Claims in California?

Insurance companies reject claims for many different reasons. Understanding why yours was denied helps you figure out the best way to respond.

Some of the most common reasons include:

• Missing or incomplete paperwork. Insurers often say they didn’t receive all the forms, medical records, or evidence they asked for.
• Late filing. Most policies have strict deadlines for reporting accidents or submitting claims.
• Policy exclusions. Your situation might fall under a specific exclusion listed in your policy.
• Lapsed coverage. If your policy wasn’t active at the time of the incident, the insurer may refuse to pay.
• Disputes over fault or liability. The insurance company might claim you were responsible for the accident or that their insured party wasn’t at fault.
• Disagreements about the extent of damages. They may accept that something happened but argue that your losses aren’t as severe as you claim.
• Accusations of misrepresentation. Insurers sometimes say you provided false information on your application or during the claims process.

Some denials have legitimate grounds based on policy language or missing information. Others stem from the insurer’s interpretation of ambiguous terms or deliberate delay tactics.

However, many denials that seem final can actually be reversed once you provide the right evidence or challenge their reasoning.

What Should You Do Immediately After Receiving a Denial Letter?

The moment you get a denial letter, your next actions matter. Don’t panic or ignore the letter. Instead, take these steps right away:

• Start by reading the denial letter from top to bottom. Look for the specific reason the insurer gives for rejecting your claim. They should reference particular policy clauses, exclusions, or missing information. Make note of any deadlines mentioned for filing an appeal or providing additional documents.
• Keep a copy of everything. Save the denial letter along with the date you received it. This becomes your reference point for appeal timelines and future communications.
• Contact the insurance adjuster handling your claim. Ask for a written explanation if anything in the letter seems unclear. Get their response in writing through email or a follow-up letter. Phone conversations can be useful, but written records protect you later.
• Gather any documentation that directly addresses their stated reason for denial. If they say you missed a deadline, find proof of when you submitted your claim. If they claim insufficient evidence, collect additional medical records, repair estimates, or witness statements that support your case.

Can You Appeal an Insurance Claim Denial in California?

Yes. In California, you have the right to challenge an insurance company’s decision through an internal appeal. A denial doesn’t have to be the end of your claim.

Start by reviewing your policy carefully. Every insurance plan includes specific steps and deadlines for filing an appeal, usually between 30 and 180 days after you receive the denial, depending on the type of coverage.

Knowing these timelines is crucial because missing one could prevent your appeal from being reviewed.

When you’re ready to appeal, do it in writing. Explain clearly and calmly why you believe the denial was wrong, and include any evidence that supports your case.

Keep organized copies of everything you send and get proof of delivery. Sending your appeal through certified mail with a return receipt helps create a reliable paper trail that confirms when the insurer received your documents.

Most importantly, don’t give up. Insurance appeals often take time, and companies may not respond right away. Continue following up, stay polite but firm, and document every phone call or email. Persistence and clear records can make all the difference in getting your claim fairly reconsidered.

What Evidence Can Help Reverse a Denied Claim?

Strong documentation often makes the difference between a rejected and approved claim. The right evidence proves your case and removes any reasonable doubt about what happened, for instance:

• Medical documentation serves as powerful proof for injury claims. Get detailed reports from your doctors explaining your diagnosis, treatment plan, and how the injury relates to the incident. Include billing statements showing the actual costs of care.
• For property or vehicle damage, collect repair estimates from licensed professionals. Take extensive photos showing all angles of the damage. If possible, get multiple estimates to demonstrate consistent pricing.
• Witness statements add credibility. Anyone who saw the accident or can verify your account should provide a written statement describing what they observed.
• Police reports and official accident documentation carry significant weight. These third-party records often include details about fault, road conditions, and immediate observations from the scene.
• Expert evaluations can counter the insurer’s claims. If they hired an expert who disputes your version of events, hire your own professional to provide an independent assessment. This works particularly well for complex injury cases or structural damage evaluations.

The more comprehensive your documentation, the harder it becomes for an insurer to justify their denial.

What Are “Bad Faith” Insurance Denials?

Bad faith happens when an insurance company unreasonably refuses to honor a valid claim. This goes beyond simple disagreements about policy terms. Bad faith involves deliberate misconduct or gross negligence.

Common examples of bad faith behavior include:

• Ignoring clear evidence you provided
• Deliberately misreading policy language to avoid paying
• Offering settlements far below what your claim is worth
• Delaying the claims process without reason
• Failing to investigate your claim properly
• Denying claims without providing a reasonable explanation
• Changing their explanation for denial multiple times

California law treats bad faith seriously. Insurers have a legal duty to act fairly and honor legitimate claims. When they violate this duty, they can be held liable for more than just the original claim amount. Victims of bad faith can pursue additional compensation for financial harm caused by the delay, emotional distress, and attorney’s fees.

If you suspect your insurer is acting in bad faith, document everything. Keep records of every delay, every inconsistent explanation, and every piece of evidence they ignored.

How Do California Laws Protect You After a Denied Claim?

California has specific regulations that govern how insurance companies must handle claims. These rules exist to protect consumers from unfair treatment.

The California Fair Claims Settlement Practices Regulations (found in Cal. Code Regs., Title 10, §2695) set clear standards for this. Insurance companies must:

• Communicate promptly about your claim status
• Investigate claims thoroughly and fairly
• Make decisions based on actual evidence
• Provide clear written explanations for denials
• Pay valid claims within specific timeframes
• Respond to your communications within set deadlines

When insurers violate these regulations, they face penalties. Violations can result in fines, license suspension, or legal liability.

The California Department of Insurance oversees these rules and investigates consumer complaints. They can pressure insurers to reconsider wrongful denials and hold companies accountable for violations.

Knowing these protections helps you recognize when an insurer crosses the line from legitimate denial to regulatory violation.

When Should You File a Complaint With the California Department of Insurance?

The Department of Insurance serves as a watchdog for unfair insurance practices. Filing a complaint makes sense in several situations.

Consider filing if:

• The insurer repeatedly delays your claim without explanation
• Your appeals go ignored or unanswered
• You received no written explanation for the denial
• The denial clearly misinterprets your policy language
• The company violated specific regulations during the claims process
• You suspect bad faith but need an official investigation

You can file complaints online through the Department’s website or submit paperwork by mail. Include copies of your denial letter, policy documents, all correspondence with the insurer, and any evidence supporting your claim.

The Department reviews complaints and may contact the insurer on your behalf. While they can’t force a company to pay your claim, their involvement often pushes insurers to reconsider. Having an official complaint on record also strengthens your position if you later pursue legal action.

When Does It Make Sense to Hire a Lawyer?

Some insurance disputes require professional legal help. Knowing when to call an attorney can save you time and increase your chances of success.

Consider hiring a lawyer if:

• Your claim involves serious injuries, permanent disability, or wrongful death
• The financial value of your claim is substantial
• The insurer acts in bad faith by ignoring evidence or making unreasonable arguments
• Your appeals keep getting denied despite strong evidence
• The insurance company refuses to communicate or provide clear explanations
• You’re facing complex legal issues about policy interpretation

Attorneys who handle insurance disputes bring several advantages:

• They review your policy to find errors in the insurer’s denial.
• They understand the legal standards that govern insurance claims and can identify violations.
• They negotiate directly with insurance companies and their legal teams.
• If necessary, they file lawsuits to force payment.

What Compensation Can You Recover After a Wrongful Denial?

Challenging a wrongful denial can result in several types of compensation beyond the original claim amount.

You can recover:

• The full value of your original claim
• Interest on payments that were delayed
• Attorney’s fees if you had to hire a lawyer to fight the denial
• Compensation for financial harm caused by the delay (like loan interest or late fees)
• Emotional distress damages in bad faith cases
• Punitive damages if the insurer’s behavior was particularly egregious

Punitive damages send a message that malicious or deceptive conduct won’t be tolerated. Courts award these in cases where insurers deliberately cheated policyholders or acted with conscious disregard for their rights.

The goal extends beyond getting paid. Holding insurers accountable prevents them from using the same tactics on other policyholders.

How Can You Avoid Claim Denials in the Future?

Prevention is always easier than fighting a denial. Taking the right steps from the start reduces your risk of rejection.

Follow these practices:

• Report any incident or loss to your insurer immediately, even if you’re not sure whether you’ll file a claim
• Read your policy carefully so you understand what’s covered and what’s excluded
• Keep detailed records of all correspondence with your insurance company, including dates, times, and the names of people you spoke with
• Submit complete documentation the first time, including all requested forms and supporting evidence
• Meet every deadline in your policy for filing claims or providing additional information
• Take photos or video of damage as soon as possible after an incident
• Get medical treatment right away for injuries and follow your doctor’s recommendations
• Work with licensed, reputable repair shops and medical providers
• Ask questions if anything in your policy seems unclear

Being proactive about documentation and communication makes your claim stronger from the start. Insurers have fewer opportunities to deny claims backed by thorough evidence and timely reporting.

Talk to Thompson Law About an Insurance Claim Denial in California

Dealing with a claim denial adds stress to an already difficult situation. Thompson Law understands how insurance companies operate and knows how to challenge unfair denials.

The firm can review your case, identify signs of bad faith, and build a strong appeal or lawsuit on your behalf. You deserve the coverage you paid for.

Contact Thompson Law today for a FREE CONSULTATION if your insurance company denied your claim in California.