What to Do If Your Car Insurance Claim Is Denied in Texas

Reviewed by Louis Patino, JD, DC

Louis Patino, JD, DC
A former U.S. Army Combat Medic, Dr. Louis Patino is a distinguished attorney recognised by Top Attorneys of America, Expertise, and the American Institute of Trial Lawyers. He has a Doctor of Jurisprudence from Texas Southern University and a Doctor of Chiropractic from Parker College of Chiropractic.

Image of a calculator for determining car insurance payout

You likely rely on your car every day. You might use it to save time getting to and from work and for the convenience of not relying on public transport. Maybe you cherish the privacy afforded by driving your vehicle compared to ride-sharing. Or perhaps you love the flexibility and freedom to head out on a road trip with friends or family.

And then a car accident occurs. Fortunately, you have car insurance, and you could benefit from a payout to cover your losses. But what if your claim is denied?

Car insurance exists to provide financial protection, but an insurance company can deny a claim for several reasons. This blog explains why your claim might have been denied and what you can do about it.

Common Reasons for Insurance Claim Denials

Being in a car accident is stressful enough, let alone having your car insurance claim denied. Before deciding on the best action, you need to understand the insurance company’s justification for denying your claim. Reasons for a claim denial range from clerical errors and missed deadlines to policy technicalities and disputes over liability. If these situations sound familiar, our accident attorney can clarify your legal rights and explain your options.

You Were Intoxicated during the Accident

An insurance company might delay your claim if you were intoxicated when your accident happened, whether under the influence of alcohol or drugs. Your claim can also be denied if you were engaging in any other illegal activity during the crash.

You Filed Your Claim Too Late

Every insurance policy outlines a specific timeframe for reporting a car accident. Insurers require claimants to report accidents promptly so they can investigate the accident. Therefore, failing to act quickly can result in a denied claim. Your priority after gathering evidence at the scene (such as photographs of your injuries and vehicle damage on your cell phone), collecting contact and insurance details from all parties involved, and seeking medical attention for your injuries should be to check with your insurance company (or the insurance company of the party you believe is responsible for your accident) to find out how long you have to put in a claim.

Late filing can also impact your policy, and your rate may increase if you do not report your accident in time. Insurance companies may raise premiums after an accident regardless, even if it was not your fault (although not as much compared to if the accident was your fault), but filing a claim within the required period will minimize the impact on the cost of your car insurance.

Sometimes, an insurance company might deny your claim because you missed the reporting deadline, even if there was no way you could reasonably inform your insurer about your accident. For example, you may have been in hospital or suffered a severe brain injury that prevented you from understanding your requirements. In these situations, exceptions can apply. In this situation, notify the insurance company as soon as possible and consider consulting a car accident lawyer to protect your rights.

Your Accident Involved an Uninsured Driver

An insurance company may deny a claim if someone not listed on your policy was driving during the accident.

Your car insurance claim might also be denied if the driver responsible was uninsured. Being denied coverage for this reason can be distressing. After all, you have insurance, yet you are left to suffer the physical and emotional impact of your injuries and the financial burden of not being able to claim.

Read More: What to Do When You’re in an Accident with an Uninsured Driver

When your insurance company pays out on a claim for an accident that wasn’t your fault, it will seek to recover the amount paid to you from the at-fault party’s (often, the other driver) insurance company. This process is called insurance subrogation. Unfortunately, your insurer cannot recover the amount paid if the driver who caused your accident does not have insurance, so your insurer will likely deny your claim.

Motorists can protect themselves from such a situation if they have uninsured motorist coverage. Insurance companies often package policies in different ways and may use alternative names for the same product, so it’s always worth contacting your insurer to see if your policy protects you in accidents with underinsured or uninsured drivers.

Lack of Coverage

Auto insurance companies often deny a car accident claim because a driver lacks the correct coverage. It may be that you do not have the correct type of insurance or that your damages (the financial losses you’ve incurred) exceed your policy coverage limits.

Texas law requires motorists to have basic liability insurance. The mandatory minimum for coverage follows the 30/60/25 rule, requiring drivers to have:

  • $30,000 of coverage for injuries per person
  • $60,000 of coverage for injuries per accident
  • $25,000 of coverage for property damage.

But policy minimums are just that, and a basic insurance policy that merely fulfills your legal obligations may not be comprehensive enough to offer the protection you need after an accident.

Other types of car insurance available include:

Collision coverage: This covers damage to your car from a collision with another vehicle or an object, such as a tree, telephone pole, or guardrail.

Comprehensive coverage: This policy covers damage resulting from theft, fire, vandalism, and collision with an animal (such as deer). It also covers damage caused by inclement weather, including hailstorms or floods.

Underinsured/uninsured motorist coverage: These policies protect you if you’re hit by an uninsured driver or if the other party’s coverage does not cover your damages. Auto insurers sometimes sell these separately; others combine them. Underinsured motorist coverage tops up a claim if your losses exceed the liable party’s coverage. For example, if the driver responsible for your accident has the minimum coverage required by Texas law ($30,000) and your damages total $40,000, your insurance policy will make up the difference — as long as you have at least $10,000 in coverage. Uninsured motorist coverage pays out when you’re in an accident with an underinsured driver, providing an alternative to suing the party when they may not have the funds for your claim. While this may seem like an unnecessary expense when you take out your policy, the alternative — having your car insurance claim denied — can prove even costlier. According to the Insurance Information Institute, over eight percent of drivers in Texas do not carry insurance.

Issues Proving Your Losses

Insufficient proof of loss is a common reason for denial. You must prove you’ve suffered tangible losses because of your accident for an insurance company to honor your claim. Your word alone is not sufficient, so you must include all supporting documents as part of your claim.

Evidence proving your losses can include medical bills and records, police reports, car repair bills, and wage slips proving your income (if you cannot work due to your injuries). If you’re not sure what documents you need or you are concerned you do not have enough evidence, a dedicated car accident lawyer can help.

You Do Not Have a License or Insurance

An insurance company may include a clause in a policy stating that an insured party must have a valid driver’s license. If you lose your license, are suspended from driving, or fail to renew your license, your claim will likely be denied.

As you might expect, an insurance company will also deny a claim if your insurance has expired or you lapse on a regular payment. This need not be intentional — you may forget to make a payment, but an insurer is unlikely to be forgiving. A car insurance claim can make the difference between affording the treatment you need after your accident and struggling to make ends meet, so you must keep on top of your insurance bill.

You Have Pre-existing Injuries

An insurance company may deny your car insurance claim by arguing your injuries were pre-existing and did not occur from your accident.

You might have sustained injuries before the accident, but the crash made them worse. This scenario does not automatically disqualify you from being entitled to a payout, even if your insurance claim is initially denied.

For example, you might have suffered chronic back pain for years that caused occasional discomfort but was otherwise manageable and did not impact your ability to do most activities. After your collision, you suffer pain daily and cannot do specific tasks.

To challenge a denied claim on the grounds of pre-existing injuries, you must establish a clear link between the accident and your injuries.

Your denial letter will explain what evidence (or lack thereof) an insurance company considered when deciding the outcome of your claim. Other actions that can support your claim for pre-existing injuries include gathering medical records (ideally demonstrating your injuries immediately after your accident and progress over time) and hiring a medical expert to examine you and testify to how your car accident aggravated your injuries.

You Are Partly Responsible for the Accident

An insurance company may deny your claim because you are partly liable for your accident and injuries. Each state has unique laws dictating whether you can recover compensation if your actions contributed to an accident.

Texas has modified comparative negligence laws, which allow you to claim as long as you are less than 51% at fault.

Take the following scenario:

Two motorists are traveling down a highway. The driver behind closely follows the vehicle ahead despite there being room for a larger gap. The motorist in the car ahead brakes suddenly, causing a rear-end accident. The driver who rear-ends the car in front is found to be partly responsible for the collision because they would not have crashed if they had maintained a safer gap.

If you are found to be partly liable, it will impact your claim. If you are less than 51% at fault, your payout is reduced by your proportionate fault. For example, if you are entitled to $40,000, and you are 20% responsible, you will receive the remaining 80% ($32,000). If you are 51% or more at fault, you cannot recover any money in a claim.

The proportion of fault is determined by a jury in a lawsuit, but insurance companies will still decide who is responsible — and how much fault is ascribed to each party — when evaluating a claim.

Unfortunately, this determination can be inaccurate, especially if there is a lack of supporting evidence and it is one party’s word against another’s.

Your Claim Is Denied in Bad Faith

In the car insurance industry, “bad faith” encompasses practices such as:

  • Refusing a rightful claim, including rejecting a claim without justifying the reason
  • Failing to investigate a claim promptly
  • Failing to cooperate with a policyholder in processing their claim
  • Excessively delaying a claim or failing to provide updates on a claim’s status
  • Lowballing a policyholder
  • Misrepresenting policy language to avoid covering a claim or creating confusion concerning a policy’s terms and conditions.

Insurance companies are required to act fairly and in good faith, so such practices are considered unlawful.

Steps to Take When Your Insurance Claim Is Denied

Having your Texas car insurance claim denied is frustrating, but the worst thing you can do is automatically assume it’s the end of the road and that you have no legal recourse.

An insurance claim denial is not final, and there are several steps you can take.

Firstly, though, it’s vital to understand what not to do when you receive a denial letter.

Do Not Take It Out on an Insurance Adjuster

It’s natural to feel annoyed and distressed after a claim denial. You may have been relying on a payout to settle your medical bills or provide for your family until you’re well enough to return to work, so having your claim denied can be frightening.

But losing your temper with an insurance adjuster won’t help your case. If you intend to challenge the claim denial, it pays to be courteous in your communications. Insurance adjusters frequently deal with upset and angry claimants who are dissatisfied with the progress or outcome of a claim, so remaining calm and being polite can go a long way and ensure you stand out for all the right reasons. If you can align yourself with an insurance adjuster, they may be more likely to consider the situation from your perspective, resulting in a favorable outcome.

Review and Understand the Denial Letter

When you receive a letter confirming your car insurance claim has been denied, you must review it carefully.

Note the reason cited for your claim denial and cross-reference it against your policy. If you do not have a copy of your insurance policy, ask your insurer to provide it.

You should also review the letter for information on what to do if you disagree with the insurer’s decision — there may be a specific deadline for appealing.

If the letter does not clearly state why the insurance company denied your claim, it may constitute bad faith practices, and an appeal could result in a judge ordering that the insurance company pay your claim in full.

Depending on the reason for your claim being denied, you have several options:

Appealing the Decision

If your Texas car insurance claim is denied, you have the right to appeal. Appealing does not guarantee the insurance company will reverse the decision, but it does allow for your claim to be reconsidered.

Do not hesitate to contact your insurance company for clarification. Keep records of all correspondence with the insurance company. If you phone an insurer to request a reconsideration, follow up in writing to ensure a paper trail.

In your request, outline why the claim should have been honored, citing specific policies, clauses, and additional evidence.

Evidence can range from photographs or video footage of the collision and your injuries, statements from individuals who witnessed the crash, medical reports, receipts and estimates, expert witness testimony (including from medical and economic experts who can testify to the severity of your injuries and the financial impact of your injuries, respectively), and the accident report created by law enforcement.

Small Claims Court

Small claims court allows individuals to sue a party for up to $20,000 in Texas. It is designed to be informal and easily accessible, so unlike in higher courts, parties frequently represent themselves, and cases tend to be heard and decided much faster — usually within months.

If your car insurance claim is worth $20,000 or less, it is worth considering this legal avenue. However, do not mistake the less formal proceedings and lack of attorney representation for an easy win — proceeding to small claims court is a legal procedure and, as such, you are responsible for:

  • Filing the lawsuit — including completing all paperwork accurately, paying a filing fee, and “serving” (formally notifying) the insurance company
  • Gathering evidence to support your case
  • Presenting a compelling and persuasive argument to a judge.

File a Personal Injury Lawsuit

Your other legal option is to file a personal injury lawsuit. A lawsuit can be worthwhile if you have a strong case despite the insurance company denying your Texas car accident claim (even if your appeal is unsuccessful) and your losses total more than the $20,000 you can pursue in small claims court.

There are several advantages of a personal injury lawsuit, including the significant compensation you could receive. A judge or jury can order the defendant to cover your economic damages (the tangible costs associated with your injury, including medical bills, vehicle repairs, and lost wages) and non-economic damages (compensation for the impact of your injury on your life, such as if you suffer pain, emotional distress, or loss of enjoyment because your injury prevents you from doing certain activities). A lawsuit can also result in a punitive damages award designed to punish the defendant and deter similar behavior. Punitive damages are more likely if an insurance company acted in bad faith in denying your claim.

Filing a lawsuit also demonstrates conviction in your claim. Proving you are serious is not reason enough for taking this route, but it may help tip the scales in your favor. By showing you are prepared to go to court in what could be a lengthy and expensive process, the defendant may be more open to reevaluating your claim or negotiating a fair settlement to avoid potential reputation damage and the unpredictability of a trial.

A Note on the Statute of Limitations

The statute of limitations is the time limit for filing legal action. The statute of limitations for personal injury claims in Texas is two years from the date of your accident.

Two years may seem more than enough time, but when you consider that you must file your initial car insurance claim, wait for a response, prepare an appeal, and, finally, decide to pursue a lawsuit, you may have little time left.

You also do not want to rush these steps. You should take the time to gather the right evidence, build a strong appeal, and consider the various implications of filing suit — including the emotional burden and risk that it won’t succeed.

If you do not file suit within two years of your accident, the court will throw out your case unless there are extenuating circumstances, such as if an insurance company acted in bad faith by consciously dragging out your claim so that you would not have reasonable time to challenge the decision.

When Filing a Lawsuit Might Not Be the Right Option for You

For all the advantages of filing a personal injury lawsuit, there are several drawbacks. Juries are unpredictable and could find in the defendant’s favor. If your claim was denied over a shared liability dispute, a trial could result in you being found majorly liable and having to pay compensation to another party.

Filing a lawsuit may appear to be the best course if your claim is denied because the responsible party did not have insurance and you did not have uninsured motorist coverage. However, even if you win your case, you may struggle to recover the compensation awarded — often, motorists do not have insurance because they cannot afford it, meaning they may not be able to afford a sizeable compensation judgment, either.

Why You Should Always Consult a Personal Injury Lawyer

We always recommend seeking legal advice when your car accident claim is denied in Texas. If you are considering small claims court, you do not need an attorney, but they can prove a valuable partner in making your case.

A dedicated car accident lawyer can review your denial letter, explain the legal jargon, and determine your chances of successfully appealing it. They can also highlight the evidence you need to make your case — and help you gather it — and liaise with the insurance company on your behalf. Insurance adjusters are notoriously tough negotiators and may employ sneaky tactics to reduce liability and avoid paying a claim. But the best accident attorney — like our Dr. Louis Patino — is equally relentless. Hiring an attorney can turn the tide of your claim and successfully negotiate a settlement that fairly compensates you for your damages, ensuring you avoid the stress, uncertainty, and cost of going to court.

Of course, a personal injury lawyer can represent you in court if you choose to file a lawsuit. While there are never guarantees, we will clearly explain your options and your chance of success at trial based on our decades of experience trying similar cases.

A Quick Recap of What to Do If Your Car Accident Claim Is Denied

Here’s our quick four-step guide on what to do if your Texas car accident insurance claim is denied:

  1. Do not panic, and try to keep your emotions in check. Do not act rashly toward the insurance company or write your claim off as a non-starter. You may be able to pursue multiple legal avenues depending on your circumstances.
  2. Review your denial letter carefully, request additional information from the insurer, and record all communication.
  3. Consider appealing the decision, heading to small claims court if your claim is worth $20,000 or less, or filing a personal injury lawsuit. Keep an eye on the clock to ensure you initiate legal proceedings within the two-year statute of limitations.
  4. Always consult a Texas car accident lawyer to explore your options and receive valuable legal advice and support.

Contacting a Texas Car Accident Attorney Who Handles Denied Insurance Claims

Navigating the appeals process on your own can be complex and overwhelming. Our car accident lawyer in McAllen and San Antonio specializes in car accident claims and can advocate for your rights and fight to secure the compensation you deserve.

We have successfully represented clients injured in car accidents in San Antonio, McAllen, and the surrounding areas, including Rio Grande City, Mission, Edinburg, Converse, and Schertz. You can book a free, no-obligation case review with award-winning attorney Dr. Louis Patino to discover where you stand.

To get started, call 855-LAW-NINJA, submit a confidential contact form, or pop into one of our Texas offices. You can reach us 24/7, and you will only pay legal fees when we win your case.

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