What to Do if Your Insurance Claim is Denied

*Updated November 12th, 2025

Filing an insurance claim should be straightforward—you’ve paid for coverage, so when you need it, your insurer steps in. But all too often, policyholders find themselves facing unexpected insurance claim denials that seem confusing or unfair. Whether it’s a health plan claim for a necessary procedure, a property insurance claim for home repairs, or an auto insurance claim after an accident, being told your insurance company denied your claim can create financial stress and uncertainty.

Studies show that roughly 15% of all insurance claims are initially denied, with higher rejection rates in areas like health and property insurance. The good news? Many denials can be successfully appealed—but only if you understand your rights and the steps to take to challenge the decision.

This guide covers the most common reasons an insurance claim is denied, how to appeal the decision, and when to seek professional or legal help. By knowing how to respond and what evidence to provide, you can strengthen your case and improve your chances of approval.

Why Insurance Claims Get Denied

Insurance companies reject claims for a variety of reasons—some valid, others preventable. Understanding these common pitfalls can help you avoid unnecessary delays and claim denials.

1. Incomplete or Incorrect Information

Even small mistakes—like an incorrect policy number, missing signatures, or coding errors—can lead to an automatic denial. Fortunately, these issues are often easy to correct by resubmitting the claim with proper details.

2. Policy Exclusions

Your insurance policy includes specific exclusions. Health insurers may deny coverage for elective or experimental treatments, while home insurers may exclude damage caused by floods or earthquakes unless you have additional coverage. Always review your claim details and check your policy to understand your insurance coverage limits.

3. Missed Deadlines

Each insurer sets strict timelines for when you can file a claim. For example, health plan claims are often limited to 90–180 days after treatment, while property insurance or auto insurance claims may need to be filed within 30–60 days. Missing these deadlines is one of the most common reasons a claim is denied.

4. Lack of Medical Necessity

If your insurer believes a treatment wasn’t medically necessary, your claim may be denied. Supporting your claim with medical records or a letter from your doctor explaining the necessity can help during the appeals process.

5. Insufficient Documentation

Without proper supporting documentation—like receipts, repair estimates, or medical bills—your claim might not hold up. Keep records of everything to support your claim if it’s questioned later.

6. Lapsed or Inactive Policy

If you miss premium payments and your policy lapses, your insurer can legally deny a claim. Even if you later reinstate the policy, any incident that occurred during the lapse likely won’t be covered.

Steps to Take If Your Claim Is Denied

A denial letter isn’t the end of the road. Here are the steps you can take to appeal and pursue a fair outcome.

1. Review the Denial Letter Carefully

Your insurer must provide a written explanation outlining the reason for the denial. Review it carefully to determine if it was caused by missing information, policy exclusions, or administrative errors.

2. Cross-Check Your Insurance Policy

Compare the insurance company’s decision with your policy terms. If the insurer claims something isn’t covered, but your insurance plan says otherwise, that’s strong evidence for your appeal.

3. Contact the Insurance Company

Call your insurer and ask to speak with the claims adjuster or insurance adjuster handling your case. Clarify the reason your insurance company denied your claim, and ask what supporting evidence or documentation they need to reconsider.

4. Gather Additional Evidence

Collect medical records, receipts, repair estimates, or witness statements to strengthen your appeal. The more evidence and documentation you provide, the stronger your case will be.

5. Check Appeal Deadlines

Most insurance companies require you to file an appeal within 30–180 days after receiving the denial letter. Missing this window can result in an automatic rejection.

How to Appeal an Insurance Claim Denial

A thorough, well-prepared appeal can often reverse a denial. Follow these steps to take when preparing your case.

Step 1: Submit a Formal Appeal Letter

Your appeal should include:

• Your name, policy number, and claim number

• A request to appeal the decision

• A clear explanation of why you believe the denial was incorrect

• Relevant supporting documentation (e.g., medical records, repair bills, or expert statements)

• A request for a written response within the insurer’s standard review period

Send your formal letter via certified mail or secure email for proof of submission.

Step 2: Follow Up on the Review

After submitting your appeal, follow up within the expected timeframe. Health insurers typically must complete an internal review within 30–60 days, depending on the type of claim.

Step 3: Request an External Review

If your internal appeals process is unsuccessful, you can request an external review by a neutral third party. For health plan disputes, this step is required under federal law. The reviewer’s decision is binding, and the insurance company didn’t overrule it can be held accountable.

Step 4: File a Complaint with State Insurance Regulators

If your insurance company denied your appeal despite strong evidence, you can file a complaint with your state insurance department or state insurance commissioner. They can investigate potential bad faith practices or violations of state law.

What If Your Appeal Is Denied?

Even if your appeal is unsuccessful, you still have options.

• Request another external review if available under your policy.

• Consult a public insurance adjuster or insurance attorney who understands insurance law and can pursue action against the insurance company.

• File a lawsuit if you suspect bad faith or unfair handling of your denied claim.

• Pay out-of-pocket for urgent expenses, such as medical costs or property damage, and later seek reimbursement with receipts and documentation.

How to Prevent Future Claim Denials

Avoid future claim denials by taking proactive steps:

• Check your policy and review it carefully for coverage limits and exclusions.

• Submit claims on time and confirm your insurer received them.

• Keep thorough evidence and documentation for every claim.

• Seek pre-approval for medical procedures under your health plan.

• Stay up-to-date on laws in your state regarding claim rights.

• Work with an insurance provider or broker who can clarify your insurance coverage.

When to Find Legal Help

Not every insurance claim denial requires an attorney, but professional help can make a difference if your insurance company denied your claim without valid cause.

Hire a Public Insurance Adjuster

A public adjuster or claims advocate can help you review your claim, gather evidence, and negotiate a fair settlement with your insurer.

Consult a Legal Professional

If you suspect bad faith, a lawyer specializing in insurance law can help you appeal your claim, dispute the company’s decision, or pursue compensation through a personal injury lawsuit if applicable.

File a Complaint

If your insurer repeatedly denies coverage or delays payments, file a complaint with your state insurance commissioner. This step can prompt an official investigation into the insurance company’s claims-handling practices.

Conclusion

Dealing with a denied insurance claim can be frustrating, but it doesn’t have to be final. Many insurance claim denials happen due to clerical mistakes, missing documents, or misunderstandings—all of which can be fixed through the appeals process.

If your insurance company denied your claim, take the steps to appeal quickly, provide supporting evidence, and stay persistent. Policyholders who understand why their claim was rejected and act promptly often see better results.

Persistence pays off. Many initially denied claims are later approved once policyholders present solid documentation and follow the correct next steps. By staying informed, organized, and proactive, you can protect your rights, get the coverage you deserve, and prevent future insurance claim denial issues.