What Happens When Your Insurance Company Won’t Pay Your Claim?

Paying insurance premiums is a fact of life. When you borrow money for a house, you need home insurance. Car owners must buy auto insurance. To protect your family, you need life insurance. And everyone has some kind of health insurance.

The insurance companies have great ads (Flo, Jake, “Chaos,” ducks and lizards) to make you believe they will take care of you if anything happens. That's their promise.

If the insurance company does not keep their promise, you have rights. It's a legal contract.

The insurance company must pay your claim - and all of it - if something happens.

But there’s more.  All insurance companies are really selling is a promise.  And it’s one you’ll already have paid for before you know if it’s any good or not.  That gives the insurers (many of whom exist specifically to make a profit) a lot of power (and a lot of incentive to keep your money by denying or undervaluing your claim).  That’s not exactly a level playing field.

To make things a bit more level, the law imposes on every insurer a duty to act in good faith, meaning they cannot put their own interests above yours. If an insurance company breaches the contract and is found to have acted in bad faith, they must not only pay your claim, but your attorney's fees, and other damages.

What to do if the insurance company won't pay? Here’s where to start:

• Make sure you get a clear - and written - explanation of why your insurance company is denying your claim (or valuing it less than you think fair) with references to the parts of your policy it is relying on;
• Get your policy and review it to see if what your insurer says is true;
• Consider making a complaint to the South Carolina Department of Insurance if you feel you are being treated unfairly, even if your only complaint is that your insurer is delaying making a decision.
• Talk to us, or another lawyer who handles insurance denials and bad faith claims. Just click “Quick Contact" on our website and fill in the form.

Remember, we’re always here to answer your questions not just about insurance, but about credit reporting errors, car dealer misconduct, bank disputes and abusive collection practices.  And if you have a vehicle accident or another matter we can’t personally handle contact us anyway — we’ll work hard to get you to the right place.