A denied insurance claim can make you wonder how you are supposed to pay for injuries and losses after a California car accident that was not your fault.
You may have submitted the claim, provided medical records, answered the adjuster’s questions, and waited for a decision.
Then the insurer sent a denial.
That letter does not always end your options. California insurance regulations require insurers to investigate claims and provide specific reasons when they deny or limit coverage. The basis for a denial can be reviewed against the policy, the evidence, and applicable California law.
Easton & Easton has spent more than three decades handling personal injury matters in Orange County. When an insurer disputes liability, questions the cause of an injury, or refuses to pay a claim, an attorney can review how the decision was reached and what options may remain.
Key Takeaways
- A California insurer must provide a reasonable explanation for a claim denial and identify the applicable policy or legal basis when required by state regulations.
- A complaint to the California Department of Insurance is free and may help address certain problems with an insurer, but the department cannot award damages or require an insurer to pay a disputed claim.
- California’s two-year statute of limitations generally applies to personal injury lawsuits arising from a car accident, although other deadlines may apply.
- A denial by your own insurer can raise different legal issues from a claim against the other driver’s insurer, including potential insurance bad faith.
- Being partly responsible for a crash does not automatically prevent recovery. California follows a comparative negligence system that can reduce damages based on the claimant’s share of fault.
Why California Insurers Deny Car Accident Claims
An insurance denial can be based on disputed facts, questions about coverage, or an insurer’s position that the evidence does not establish the claimed losses. The reason stated in the denial matters because it helps determine what should be challenged and what evidence may be needed.
Disputed liability
An insurer may deny a claim because it contends its policyholder was not responsible for the crash.
The adjuster may rely on a police report, statements from the drivers, photographs, or other evidence when making that determination. A police report can be important evidence, but it is not the final word on civil liability.
Witness statements, photographs, traffic-camera footage, dashcam video, vehicle damage, accident reconstruction, and other evidence may provide a different picture of how the collision occurred.
If the insurer’s liability decision does not account for relevant evidence, reviewing that evidence can be an important part of challenging the denial.
Treatment gaps and pre-existing conditions
Medical treatment can become another point of dispute.
An insurer may argue that a delay in treatment means the crash did not cause the claimed injury. It may also point to a prior injury or medical condition and contend that the current symptoms are unrelated to the collision.
Neither issue automatically defeats a claim. Medical records, physician opinions, the timing of symptoms, the nature of the accident, and the claimant’s medical history can all help establish causation.
The question is not merely whether there was a treatment gap or prior condition. The question is what the available evidence shows about the injury and its relationship to the accident.
What Should a California Insurance Denial Letter Tell You?
California’s Fair Claims Settlement Practices Regulations address how insurers must handle and communicate decisions on claims.
Under California Code of Regulations, Title 10, Section 2695.7, an insurer that denies a claim must provide a written explanation that identifies the applicable legal or factual basis for the denial. When the denial is based on a specific policy provision, exclusion, or condition, the insurer must identify that provision.
That makes the actual denial letter important.
Look closely at:
- The reason the insurer gave for denying the claim
- Any policy provision or exclusion cited by the insurer
- The evidence the insurer says supports its position
- Whether the insurer addressed the information you submitted
- Whether the insurer is disputing liability, causation, damages, coverage, or some combination of these issues
A vague explanation or a decision that appears inconsistent with the available evidence may warrant further review.
California law also requires insurers to conduct a reasonable investigation before denying certain claims. A denial should therefore be evaluated against the investigation that preceded it, not just the language contained in the final letter.
Filing a Complaint With the California Department of Insurance
If an insurance company has denied your claim or you believe it has mishandled the claim, you can file a complaint with the California Department of Insurance.
There is no fee to file a complaint. The Department can review complaints involving insurers and may contact the insurance company about the matter. You can also submit supporting documents through the Department’s online complaint process.
A CDI complaint has limits, however. The Department does not function as a court and cannot decide every disputed issue or order an insurer to pay damages simply because a complaint was filed.
That makes it one potential step rather than a substitute for evaluating your legal claim. If the dispute involves significant injuries, contested liability, coverage issues, or a potentially unreasonable denial, legal advice may be appropriate before important deadlines expire.
What If Your Own Insurance Company Denied the Claim?
A denial by your own insurance company can involve different legal issues from a claim against the other driver’s insurer.
For example, you may be seeking benefits under uninsured or underinsured motorist coverage, medical payments coverage, or another provision of your own policy. In these situations, the terms of your policy become central to the analysis.
Your insurer also has obligations arising from the insurance relationship. California recognizes potential claims for insurance bad faith when an insurer unreasonably withholds benefits owed under a policy.
That does not mean every incorrect or disputed claim decision is bad faith. The circumstances surrounding the investigation, the policy language, the evidence available to the insurer, and the reasonableness of its position all matter.
A denied first-party claim should therefore be reviewed differently from a third-party claim against the other driver’s insurance company.
When Can an Insurance Denial Support a Bad Faith Claim?
Insurance bad faith involves more than an insurer saying no to a claim.
In California, a bad faith claim generally requires evidence that the insurer acted unreasonably in handling or denying benefits owed under the policy. The analysis can involve whether the insurer had a reasonable basis for its decision and whether it properly investigated and evaluated the claim.
What should you document?
Keep the documents and communications connected to the claim, including:
- The insurance policy and declarations page
- The denial letter
- Claim correspondence and emails
- Medical records and bills
- Photographs and videos of the accident and vehicle damage
- Police reports
- Witness information
- Notes of conversations with adjusters
- Requests for additional information
- Records showing when you submitted documents or responded to requests
A clear record can make it easier to evaluate whether the insurer’s investigation and decision were supported by the available evidence.
What can a bad faith lawsuit recover?
Potential damages depend on the facts of the case and the nature of the claim. In an appropriate case, recovery may extend beyond the policy benefits themselves and can include other damages caused by an insurer’s wrongful conduct.
Punitive damages may also be available in limited circumstances when the legal requirements for punitive damages are satisfied.
These claims are fact-specific, so a denial should not automatically be labeled bad faith simply because the insurer reached a decision you disagree with.
Watch the Deadlines After an Insurance Denial
An insurance dispute does not stop the clock on a lawsuit.
For many California personal injury claims arising from a car accident, California Code of Civil Procedure Section 335.1 provides a two-year statute of limitations for filing a personal injury lawsuit.
Other deadlines may apply to different claims.
For example, a claim involving a government entity can trigger California’s government claim requirements, including a six-month period for presenting certain claims under the Government Claims Act. Insurance policies can also contain provisions establishing procedures and deadlines for making certain first-party claims or pursuing other forms of dispute resolution.
The important point is that an insurance appeal, CDI complaint, or ongoing negotiations do not necessarily extend every legal deadline.
If a lawsuit may be necessary, identifying the applicable deadlines early can help protect the claim while the insurance dispute is being evaluated.
Frequently Asked Questions
Can I still recover compensation if I was partly at fault for the accident?
Yes. California follows a comparative negligence system. Your recovery can be reduced by your percentage of responsibility, but being partly at fault does not automatically eliminate your claim.
For example, if your total damages were $50,000 and you were found 20 percent responsible for the accident, your recovery could be reduced to $40,000.
The insurer’s assessment of fault is not necessarily the final determination of comparative negligence. Evidence from the accident can be used to challenge an insurer’s allocation of responsibility.
What if my own insurance company denied my claim?
The answer depends on the type of coverage involved and the reason for the denial.
A denial under uninsured or underinsured motorist coverage, medical payments coverage, or another provision of your own policy should be evaluated against the policy language and the evidence supporting the claim. If the insurer unreasonably withholds benefits owed under the policy, additional bad faith issues may arise.
Keep the denial letter, policy documents, claim correspondence, and records of your communications with the insurer.
Does filing a complaint with the California Department of Insurance cost anything?
No. Filing a complaint with the California Department of Insurance is free.
The Department may review the complaint and communicate with the insurer, but a CDI complaint is not the same as filing a lawsuit and does not guarantee that the insurer will pay the claim.
What if the insurer never sent a formal denial and just stopped responding?
A lack of communication can raise concerns about whether the insurer is handling the claim within the timeframes and standards required by California law.
Keep a record of when you submitted the claim, when you provided requested documents, and each attempt you made to obtain an update. If the insurer continues to delay without providing a meaningful explanation, an attorney can review the claim history and determine what options may be available.
Will hiring a lawyer make the insurance company slow down my claim?
There is no guarantee that involving an attorney will make an insurer resolve a claim faster. What it can do is change how the claim is handled.
An attorney can communicate directly with the insurer, evaluate the stated basis for the denial, gather supporting evidence, address disputed issues, and protect applicable legal deadlines while pursuing the claim.
Easton & Easton for a Denied California Car Accident Claim
An insurance denial is a decision to evaluate, not necessarily the final answer to your claim.
At Easton & Easton, the review starts with the reason for the denial and the evidence behind it. The firm can examine the accident evidence, medical documentation, insurance coverage, claim history, and communications with the insurer to determine what options may be available.
With more than three decades of experience and more than $500 million recovered for clients, Easton & Easton represents injured people in Orange County and throughout Southern California.
If an insurer has denied your California car accident claim, the next step is understanding why it was denied and whether the evidence supports that decision. Contact Easton & Easton to schedule a consultation about your claim.
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