Legal Disclaimer: This article provides general information for educational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change frequently. For advice specific to your situation, consult a licensed attorney in your area.
Your insurance company denied your claim. Now what? According to the National Association of Insurance Commissioners (NAIC), insurance denials are among the most common consumer complaints filed with state regulators — and a significant percentage are reversed on appeal. The key is knowing how to write an effective appeal letter.
This guide provides free sample letters for different types of insurance denials, explains your legal rights, and walks you through the appeal process step by step.
Why Insurance Claims Get Denied (And Why Many Denials Are Wrong)
Insurance companies deny claims for many reasons, but not all of them are legitimate. Common denial reasons include:
- Coverage exclusion: The insurer claims your policy doesn't cover the loss
- Late filing: The claim was filed past the deadline
- Insufficient documentation: Not enough evidence to support the claim
- Pre-existing condition: The insurer claims the issue existed before coverage
- Policy lapse: The insurer claims your coverage wasn't active
- Misrepresentation: The insurer claims you provided inaccurate information
Denial Reversal Rates: Studies show that 40-60% of insurance denials are reversed when the policyholder appeals. For health insurance specifically, internal appeals succeed about 50% of the time, and external reviews overturn denials in roughly 40% of cases.
What to Include in Your Appeal Letter
Every insurance denial appeal letter should contain these essential elements:
- Your policy and claim numbers — prominently displayed at the top
- Reference to the denial letter — date received and the specific reason given
- Statement of appeal — "I am formally appealing the denial of claim #..."
- Why the denial is wrong — address each reason point by point
- Policy language supporting your claim — quote the specific provisions
- Supporting documentation — medical records, repair estimates, photos, expert opinions
- Legal citations — state insurance code, bad faith statutes
- Deadline for response — typically 30 days
- Escalation path — state insurance commissioner, attorney, lawsuit
Sample Appeal Letter: Homeowner's Insurance Claim Denial
[Your Name]
[Your Address]
[City, State ZIP]
[Date]
Via Certified Mail — Return Receipt Requested
[Insurance Company Name]
Claims Department
[Address]
Re: Formal Appeal — Claim #[NUMBER]
Policy #[NUMBER]
Date of Loss: [DATE]
Dear Claims Manager,
I am writing to formally appeal the denial of my homeowner's insurance claim #[NUMBER], as communicated in your letter dated [DATE]. Your stated reason for denial — [quote their exact reason] — is incorrect for the following reasons:
1. Policy Coverage Applies
Section [X] of my policy states: "[quote the relevant coverage language]." The damage to my property falls squarely within this coverage provision because [explain why].
2. The Exclusion Does Not Apply
While your denial letter references the [specific exclusion], this exclusion does not apply because [explain why — e.g., the damage was caused by a covered peril, not the excluded one].
3. Supporting Documentation
Enclosed please find: [list documents — independent contractor estimates, photographs, expert opinion, etc.]
Legal Notice: Under [State] Insurance Code § [number], an insurer must act in good faith and deal fairly with policyholders. Unreasonable denial of a valid claim may constitute bad faith, exposing the insurer to liability for the claim amount, consequential damages, emotional distress, and punitive damages.
I request that you reverse this denial and process my claim for $[AMOUNT] within 30 days. If I do not receive a satisfactory response, I will file a complaint with the [State] Department of Insurance and pursue all available legal remedies.
Sincerely,
[Your Name]
Always Send Certified Mail: Certified mail with return receipt creates a legal record that the insurer received your appeal. This is critical if you need to prove you appealed within the required timeframe.
Type-Specific Tips
Health Insurance Denials
- You have a legal right to appeal under the Affordable Care Act
- Internal appeal: Must be filed within 180 days of denial
- External review: Available if internal appeal fails — an independent reviewer decides
- Get your doctor's support: A letter from your physician explaining medical necessity is powerful
- Urgent care: Expedited review (72 hours) available for urgent situations
Auto Insurance Denials
- Get independent estimates: Don't rely on the insurer's adjuster alone
- Demand the full investigation file: You're entitled to see what they found
- Check state-specific timelines: Most states require decisions within 30-45 days
- Diminished value claims: Many insurers deny these but they're valid in most states
Homeowner's Insurance Denials
- Read your policy carefully: Coverage disputes often hinge on specific policy language
- Get a public adjuster: They work for you, not the insurer (typically 10-15% of claim)
- Document everything: Before-and-after photos, contractor estimates, receipts
- Know the difference: Between a denial and an underpayment — different strategies apply
Understanding Bad Faith Insurance
When an insurer unreasonably denies a valid claim, that's called "bad faith." Every state has laws against it, and the penalties can be severe:
- Compensatory damages: The full claim amount plus interest
- Consequential damages: Additional losses caused by the denial (e.g., having to pay out of pocket)
- Emotional distress: Recoverable in most states for insurance bad faith
- Punitive damages: Available in many states to punish egregious conduct
- Attorney's fees: The insurer may have to pay your lawyer
Red Flags for Bad Faith: Denying without investigating, unreasonable delays, lowball offers far below actual damages, misquoting policy language, requiring excessive documentation, or failing to explain the denial in writing.
Filing a State Insurance Complaint
Your state's Department of Insurance is a powerful ally. Here's how to use them:
- Find your state's department: Search "[your state] department of insurance complaint"
- File online or by mail: Most states have online complaint forms
- Include everything: Policy number, claim number, denial letter, your appeal, all correspondence
- What happens next: The department contacts the insurer and asks them to respond
- Resolution: Many claims are resolved at this stage — insurers don't want regulatory trouble
For more on navigating insurance claims, see our comprehensive guide.
When to Hire an Attorney
Consider hiring a lawyer if:
- Your claim exceeds $10,000
- The insurer has denied your appeal
- You suspect bad faith
- The policy language is ambiguous
- You're dealing with a serious injury or major property damage
Many insurance bad faith attorneys work on contingency — they only get paid if you win. An attorney letter often prompts immediate settlement because insurers know the cost of defending a bad faith lawsuit.
Frequently Asked Questions
How do I write a letter to an insurance company for a denied claim?
Start with your policy number and claim number. State that you are formally appealing the denial. Reference the specific reason given for denial and explain why it's incorrect. Cite your policy language showing coverage applies. Include supporting documentation. Set a deadline for response (typically 30 days) and mention bad faith insurance remedies if applicable.
What is bad faith insurance denial?
Bad faith occurs when an insurance company unreasonably denies, delays, or underpays a valid claim. Examples include denying without investigation, misrepresenting policy terms, failing to explain the denial, or making lowball offers. Most states allow policyholders to sue for bad faith and recover damages beyond the claim amount.
How long does an insurance company have to respond to an appeal?
For health insurance, the ACA requires insurers to respond to internal appeals within 30 days (72 hours for urgent care). For auto and homeowner's insurance, most states require a response within 30-45 days. If they don't respond, file a complaint with your state's Department of Insurance.
Should I hire a lawyer for an insurance denial?
For smaller claims, start with your own appeal letter and a complaint to the state insurance department. For claims over $10,000 or repeated denials, consider a consumer attorney who specializes in insurance bad faith — many work on contingency.
Can I file a complaint against my insurance company?
Yes. File with your state's Department of Insurance. They investigate complaints and can order the insurer to pay valid claims. You can also file with the NAIC and the BBB. For health insurance, you can request an external review through your state.
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