Auto insurance denials highest in California, Texas and Florida

According to a Florida law firm’s recent study, California, Texas, and Florida policyholders face the most insurance claim denials in the country.

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“For consumers, a denied claim can lead to significant financial strain,” states an article on The Law Offices of Anidgar & Levine’s website. “Florida drivers, for instance, may struggle to afford timely vehicle repairs, leading to missed work, school, or appointments. In states like Michigan, ‘no-fault’ insurance can make coverage confusing, often resulting in higher premiums and frequent claim disputes.

“The broader financial and emotional toll of claim denials can create a downward spiral for policyholders, from increased transportation costs to job disruptions, especially in states with high premiums and denial rates. Without access to reliable transportation, some may struggle to attend medical appointments or fulfill work obligations, exacerbating the impact of the original incident.”

Residents of any state can file complaints with their respective departments of insurance when concerned about insurance practices or claim disputes.

In California, the firm found 4,800 complaints regarding claim denials, delayed payments, and settlement disputes. Florida followed with 3,800 regarding fraud, uninsured drivers, and settlement delays then Texas with 4,200 regarding claim handling issues and low settlement offers.

According to Anidgar & Levine, rounding out the top 10 are:

• • New York: 3,500 complaints regarding high premiums and processing delays
  • Illinois: 2,600 complaints regarding high premiums and delayed processing
  • Pennsylvania: 2,500 complaints regarding delayed processing and unsatisfactory settlements
  • Georgia: 2,200 complaints regarding claim denials and coverage disputes
  • Michigan: 2,100complaints regarding high premiums and delayed claims
  • Ohio: 2,000 complaints regarding customer service issues and long processing times
  • North Carolina: 1,800 complaints regarding rate hikes and settlement disputes

Earlier this month the San Francisco Chronicle reported that State Farm had been approved to raise auto insurance rates in California by an average of 17.7% beginning at the end of January.

GEICO, Nationwide, and AAA also filed for large rate increases, according to the newspaper.

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The Los Angeles Times reported that Allstate received a rate increase of 30%, on average, in February after temporarily pausing the sale of new auto insurance in the state late last year.

Allstate CEO and President Tom Wilson threatened to drop insurance customers in California, New York, and New Jersey in November 2023 if he didn’t receive a double-digit rate increase in all three states.

To reduce the likelihood of a claim denial, Anidgar & Levine write that it’s essential for policyholders to report the incident immediately; document thoroughly including taking photos, collecting witness statements, and keeping up with police and medical reports; submit a comprehensive and complete claim; regularly check in with the insurer for updates while keeping a log of calls, emails, and responses; get an independent damage estimate; and review settlement offers carefully knowing there’s the option to appeal or negotiate.

“You have the right to seek clarification and question the basis of the insurer’s evaluation,” the article states. “Following these steps can improve the likelihood of a smooth claims process and help avoid unnecessary stress and costs.”

They recommend contacting an attorney when:

• • A claim is denied due to technicalities, such as a missed document or a timing issue.
  • There are severe injuries or high medical bills.
  • Liability or fault is disputed.
  • Issues occur with policy limits, such as when expenses exceed policy limits. “In these cases, an attorney can explore options to pursue additional compensation either through appeals, negotiations, or even third-party claims if another party shares responsibility.”

In California, law firm Hanning & Sacchetto writes that the most common reasons an insurance company will give for “dismissively handling” a claim may include lack of evidence, delayed medical treatment, minimal vehicle damage, inconsistent statements, and failure to involve legal representation.

“If the claimant doesn’t provide sufficient documentation to prove their injuries or the accident, such as police reports, medical records, or photographs, the insurance company may question the claim’s legitimacy,” the firm wrote on its website. “When a claimant doesn’t seek medical attention immediately after an accident, it raises doubts about the severity of their injuries. Insurance companies may argue that the injuries were unrelated to the accident or aren’t as serious as claimed.

“If the accident caused only minor damage to the vehicle, the insurer may argue that it’s unlikely the claimant sustained serious injuries. They often downplay claims based on the assumption that minimal damage equals minimal injury. Any inconsistencies in the claimant’s version of events or medical reports can lead to the insurer questioning the claim’s credibility, potentially dismissing or undervaluing it.”

The attorneys echoed what Anidgar & Levine tell Floridians: gather police reports, medical records, repair estimates, photographs from the scene, and witness statements to back up insurance claims.

Similarly, collision repairers could avoid claim denials or supplements by providing sufficient documentation such as OEM repair procedures and photos throughout the entire repair process including estimates, repair plans, teardown, and pre- and post-scanning. Even if insurers still push back, detailed documentation is always wise on every repair for liability reasons should issues arise.

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Texas-based WylyCook Injury & Insurance Lawyers wrote in November that insurance companies often stall claims in the state — a “critical issue” for policyholders.

“Many policyholders encounter delays due to tactics used by insurers, such as requesting excessive documentation or citing administrative errors. These tactics prolong the claims process, causing unnecessary stress and financial strain… To protect yourself, keep thorough records of all communications with the insurer. Documenting every interaction, including phone conversations, emails, and letters, can provide a clear paper trail if escalation or legal action becomes necessary. If you suspect bad faith, requesting a formal denial letter can strengthen your position and provide valuable evidence for potential disputes.”

In Georgia, the Georgia Sun reports that critics argue the Georgia Office of Insurance and Safety Fire Commissioner (OIC) isn’t doing enough to monitor claim practices or protect policyholders.

“The office’s track record over several decades often leads to a perception of viewing insurance companies as its constituents rather than taxpaying consumers,” the article states. “Drivers may not realize the potential gaps in their policies until they need coverage most. This leaves residents vulnerable, particularly when accidents involve uninsured drivers, fraud, or disputes about liability. State officials and consumer advocates are calling for stronger oversight of insurance providers. Meanwhile, policyholders should stay informed about their coverage and prepare to act quickly if they face a denial.”

The OIC notes on its website that auto insurance policies are legal contracts and should be read carefully.

“It is written so your rights and responsibilities, as well as those of the insurance company, are clearly stated,” the OIC wrote. “You should read that policy and make certain you understand its contents. If you have questions about your insurance policy, contact your insurance agent for clarification. If you still have questions, turn to your state insurance department.

“Before signing an application for any insurance coverage, call your state insurance department and verify that the company and the agent are licensed to do business in your state. It is illegal for unlicensed insurers to sell insurance, and if you buy from an unlicensed insurer, you have no guarantee that the coverage you pay for will ever be honored.”

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