DID YOU KNOW?

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Insurance Law

Did you know? Insurance companies make mistakes sometimes.

Most people assume that when an insurance company denies a claim, the decision is final. But that’s often not true. Denials can result from simple clerical errors, misinterpretations of policy language, or even failure by the insurer to follow its own procedures.

For example:

• A homeowner’s claim for water damage might be denied as “wear and tear,” when in fact a sudden burst pipe is covered.
• A homeowner’s claim for a burst pipe embedded in the concrete slab might be misconstrued as “ground water,” but that’s not necessarily how courts always view it.
• A car accident claim could be disclaimed for “late notice,” even though the policy only requires notice within a reasonable time.
• A business interruption claim might be rejected because the insurer misreads an exclusion or fails to properly investigate the loss.

If this happens to you, here are some steps to take:

1. Request the denial letter in writing. Insurers must give specific reasons and cite the exact policy provisions they rely on.
2. Read your policy carefully. Pay attention to definitions, exclusions, and endorsements — sometimes the coverage is broader than the adjuster suggests.
3. Submit additional documentation. Photos, receipts, repair estimates, and expert opinions can strengthen your position.
4. Keep written records. Note every phone call, date, and name — these details matter later if you need to escalate.
5. Know your right to appeal or challenge the denial. Many states, including New Jersey and New York, require insurance companies to handle claims promptly and fairly. You can file a complaint with your state’s Department of Banking and Insurance if you suspect unfair handling—a cost-saving, economic approach to getting a second look at things.

If the insurer continues to deny or delay payment, you may have a claim for bad faith — when an insurance company unreasonably refuses to pay or fails to properly investigate.

The key takeaway: a denial isn’t always the end — sometimes it’s the insurer that’s mistaken.

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Ariel A. Bivas Bivas Law LLC 136 Madison Avenue, 6th Floor New York, NY 10016 Tel: (718)-490-3916 Email: [email protected] Website: www.bivas.law

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