Why Insurance Companies Deny Detroit Car Accident Claims
AsDetroit car accident lawyers, we have seen countless clients blindsided by insurance claim denials after serious crashes. Michigan’s no-fault insurance system was designed to provide quick compensation for medical bills and lost wages, but insurance companies often find ways to minimize or reject valid claims. For Detroit drivers who have paid their premiums faithfully, these denials can feel like a betrayal. Understanding why these claims are denied and how to challenge those decisions is crucial to protecting compensation rights under Michigan law.
Common Reasons Insurance Companies Deny Car Accident Claims
Insurance companies often deny claims for reasons that may sound legitimate but are, in reality, tactics to limit payouts. Some of the most common excuses include:
- Failure To File On Time – Under MCL 500.3145(1), a claimant must file a personal injury protection (PIP) claim within one year of the accident. Missing that deadline gives insurers an easy reason to deny payment.
- Disputes Over Fault – Even though Michigan follows a no-fault system, insurers may still argue that a driver’s own negligence contributed to the damages, attempting to reduce or deny certain types of coverage.
- Lack of Sufficient Evidence – Insurance companies frequently claim that medical documentation or accident reports do not support the extent of the injuries claimed.
- Policy Exclusions – Some denials are based on alleged policy violations, such as driving without permission, operating a vehicle under the influence, or using the vehicle for commercial purposes not covered by the policy.
- Independent Medical Exams (IMEs) – Insurers often send claimants to doctors they hire to perform IMEs. These physicians may report that the injuries are exaggerated or unrelated to the crash, which insurers use as justification to cut off benefits.
These denials are often motivated by profit rather than fairness. Every dollar not paid to accident victims represents money saved for the insurer.
Michigan’s No-Fault System And Claim Denials
Michigan’s No-Fault Insurance Act (MCL 500.3101) requires all vehicle owners to carry personal injury protection (PIP) coverage. PIP benefits cover reasonable medical expenses, lost wages, and replacement services, regardless of who caused the crash. However, insurance companies frequently deny these claims by disputing whether treatment was “reasonable and necessary,” as outlined in MCL 500.3107(1)(a).
In addition, if an insurer believes the injury was preexisting or caused by something other than the collision, it may argue that the PIP claim is invalid. Adjusters often use vague language like “insufficient proof of causation” to justify denials, even when the evidence clearly supports the claim.
When an insurance company wrongfully denies benefits, policyholders have the right to file a lawsuit under MCL 500.3148, which also allows recovery of attorney’s fees if the denial was unreasonable.
Bad Faith Insurance Denials
Michigan law imposes a duty on insurance companies to act in good faith when handling claims. Unfortunately, insurers sometimes engage in “bad faith” practices, such as:
- Unreasonably delaying payment
- Misrepresenting policy terms
- Conducting biased investigations
- Ignoring medical records or witness statements
- Pressuring claimants to accept low settlements
While Michigan does not have a separate statute specifically labeled “bad faith,” courts recognize that unreasonable denials can entitle victims to additional compensation, including attorney’s fees and penalties.
When we represent injured clients, we meticulously review the insurance company’s reasoning for denial. In many cases, these denials crumble under scrutiny once we present detailed medical records, expert reports, and legal documentation supporting the claim.
How To Protect A Car Accident Claim
After any Detroit car accident, several steps can make the difference between approval and denial:
- File A Police Report – Documentation is critical. A police report creates an official record of the crash.
- Seek Immediate Medical Care – Prompt treatment strengthens the link between the accident and injuries.
- Keep Detailed Records – Maintain copies of all medical bills, wage loss documentation, and correspondence with the insurer.
- Do Not Sign Anything Without Legal Review – Insurance adjusters often request that claimants sign statements or releases that limit their future rights.
- Consult An Attorney – Early legal representation ensures that filing deadlines are met and that the insurance company is held accountable under Michigan law.
By taking these proactive steps, accident victims improve their chances of receiving the full benefits owed to them.
Why Legal Representation Matters
Insurance companies employ teams of lawyers, adjusters, and medical experts whose primary goal is to protect their bottom line. Without experienced legal representation, accident victims are at a severe disadvantage.
Our law firm has handled hundreds of Detroit car accident cases involving wrongful denials, underpayment, and policy disputes. We are aware of the tactics insurers employ, ranging from lowball settlements to outright claim rejections. By combining legal knowledge with aggressive negotiation and trial experience, we help clients recover the compensation they deserve.
At Ravid & Associates, P.C., we believe insurance companies must be held accountable when they fail to honor valid claims. Our firm takes pride in protecting the rights of Michigan drivers under the state’s complex no-fault insurance system.
Frequently Asked Questions About Michigan Car Accident Claim Denials
Why Do Insurance Companies Deny Valid Claims In Michigan?
Insurers often deny claims to reduce payouts. Common excuses include insufficient medical documentation, preexisting conditions, or missed deadlines. Many denials are based on ambiguous policy language that can be challenged with the right legal evidence.
What Happens If An Insurance Company Acts In Bad Faith?
If an insurer unreasonably refuses to pay benefits, Michigan law allows the claimant to seek attorney’s fees and penalties under MCL 500.3148. Proving bad faith requires showing that the denial lacked a reasonable basis and that the insurer ignored available evidence.
Can A Claim Be Reopened After Denial?
Yes. A denied claim can be appealed or litigated if new evidence becomes available or if the initial denial was improper. Many clients discover that denials are based on incomplete investigations or biased medical evaluations.
How Long Do Accident Victims Have To Sue For Denied Benefits?
Under MCL 500.3145(1), individuals have one year from the date of the accident or the last unpaid benefit to file a PIP claim. Missing that deadline can forfeit compensation, which is why prompt legal action is essential.
Does Michigan’s No-Fault Law Cover Pain And Suffering?
PIP benefits cover medical expenses and lost income, but not pain and suffering. To pursue non-economic damages, a separate lawsuit against the at-fault driver can be filed if the injury meets the “serious impairment of body function” threshold outlined in MCL 500.3135(1).
What Should Be Done Immediately After A Claim Is Denied?
The most important step is to request the denial letter in writing. It should explain the reasons for rejection. This document helps attorneys identify errors, missing information, or potential violations of Michigan law that can be challenged in court.
Call Ravid & Associates, P.C. Today For Your Free Consultation
At Ravid & Associates, P.C., we know how frustrating it can be when insurance companies refuse to pay what is rightfully owed. Our team fights to overturn denials, recover unpaid benefits, and secure compensation for injuries and losses.
If an insurance company has denied a Detroit car accident claim, contact our firm for a free consultation. Contact our Detroit car accident injury attorneys at Ravid & Associates, P.C. today by calling (248) 948-9696 to receive your free consultation. We proudly represent clients across Detroit and throughout Michigan from our Southfield office.
When insurers play hardball, we fight harder—because Michigan accident victims deserve fairness, accountability, and justice.
