Having your car insurance claim denied in Michigan can be incredibly frustrating when you’re dealing with injuries and mounting medical bills at the same time. Unfortunately, denials are not uncommon, as insurance companies are businesses at the end of the day that want to make a profit above all else.
Whether or not the denial will hold depends on the reason behind it and the steps you take in response. However, since Michigan’s no-fault system has its own set of rules and deadlines, knowing how to challenge a denial effectively with help from a Troy car accident lawyer can make the difference between getting the benefits you’re owed and walking away with nothing.
Determine Why Your Claim Was Denied
The first step after receiving a denial is to find out exactly why the insurance company rejected your claim. Michigan law requires insurers to provide a written explanation, so reviewing that explanation carefully is essential before deciding how to respond. A car accident attorney can help you understand the insurer’s reasoning and determine whether the denial is legally justified.
Some of the most common reasons claims get denied include:
- The insurer’s independent medical examiner concluded that your treatment was no longer medically necessary
- The company claims your injuries are not related to the accident
- You missed the one-year deadline to file your PIP application under MCL 500.3145
- The insurer is relying on a policy exclusion to deny coverage
- The company alleges fraud or misrepresentation on your application
Each of these scenarios calls for a different response. In some cases, the denial may be based on a legitimate issue with your claim. In others, the insurer may be acting out of accordance with the law. Your car accident lawyer can evaluate which situation applies and advise you on the best course of action.
File an Internal Appeal
Most insurance companies have an internal appeals process that allows you to challenge a denial. While this step is worth taking, it is important to understand that the insurer is essentially reviewing its own decision. The outcome is not always favorable for the claimant.
You can also file a formal complaint with the Michigan Department of Insurance and Financial Services. DIFS has the authority to investigate insurer conduct and can intervene in situations where a company is not following state law. However, DIFS cannot force an insurer to pay a claim. Its role is regulatory, not adjudicatory.
A car accident attorney can help you prepare a strong appeal and determine whether filing a complaint with DIFS is appropriate for your situation.
File a Lawsuit to Recover Your Benefits
If the internal appeal doesn’t resolve the issue, filing a lawsuit may be your strongest option. Michigan law provides two important protections for claimants who are forced to take legal action to recover benefits that should have been paid.
First, under MCL 500.3142(4), any overdue PIP payment automatically bears simple interest at a rate of 12 percent per year. This applies whenever a payment is more than 30 days late, regardless of whether the delay was unreasonable. Second, under MCL 500.3148(1), the court can award reasonable attorney’s fees against the insurer if it determines that the company unreasonably refused to pay the claim or unreasonably delayed in making proper payment.
Together, these provisions create real financial consequences for insurance companies that improperly handle claims without justification. Many claimants find that once a lawsuit is filed, the insurer becomes far more willing to negotiate. Your car accident lawyer in Troy can file and manage the lawsuit while you focus on your recovery.
Contact a Car Accident Attorney for Help With Your Claim
If your car insurance claim has been denied in Michigan, one of the best things you can do is seek legal advice from our Troy car accident lawyers, who understand the state’s no-fault system. It may still be possible to recover the compensation you need to move forward as best as possible.
Call Khamo Law today to schedule a free consultation at (248) 466-0606 with a car accident attorney. At that time, we can review the facts of your case and answer any questions you may have about what you should do next.