How to Fight an Insurance Company's Negative Liability Determination?
It happens more often than you think. Then, as if being injured in an accident wasn't difficult enough, you receive notice from the at-fault party's insurance that they have either denied your claim or made a settlement offer far less than the cost of your injuries.
Their reason: upon investigation, they have determined their insured is not liable, or only partially, for your injuries, otherwise known as a "negative liability determination.”
While this can be a very frustrating development, especially with bills piling up around you, having an insurance company deny or "lowball" your claim is not the end of the story. You can still fight this adverse determination and hopefully get the insurance company to pay.
California is considered a "fault" state regarding car accidents. Therefore, when a car accident occurs, and a claim is filed, the insurance companies look at the facts and decide who caused the accident.
Fault can be assigned to one or both drivers. For example, one driver could be found 75% at fault while the other is 25% at fault. How much responsibility a driver has in an accident affects whether they will be eligible for financial compensation and how much they may receive.
When a car accident happens in California, one of the drivers will usually call the police. Sometimes, the police show up at the scene and take a report detailing the accident and what the officer observed. Then, they might write a citation for anyone who broke the law.
The drivers are provided a report number to get a copy of the police report after completion. Most drivers will call their insurance company to report the accident, who will assign an insurance adjuster to handle the claim.
The insurance adjuster will talk to the parties involved in the accident and review medical bills and records about claimed injuries and the police report. Then, they use all this information to issue a report on who they believe is at fault for the accident.
Why an Insurance Company Might Deny or Reduce Your Claim Amount
The fact is that insurance companies, by default, look for reasons not to pay claims. It's a backward system, but despite the fact that these companies exist to protect their customers, paying claims still hurts their bottom line.
Thus, they're not motivated to pay unless they see no reason not to. The most common reasons an insurance company might give for a negative liability determination include:
- The accident was not caused by their insured. This is probably the most common reason insurance companies give for a negative liability determination. In addition, they will likely point to evidence such as police reports, eyewitness testimony, or vague arguments to support their claim.
- The insured was not entirely at fault. This is a favorite tactic of insurance companies since California is a pure comparative fault state. Comparative fault means that even if their policyholder caused the accident, if you were partially at fault, your damages will be reduced in proportion to your level of responsibility. For example, suppose the insurance company investigates the accident and determines that their insured was 30 percent at fault and you were 70 percent at fault. In that case, they will try to pay only 30 percent of your damages. Insurance companies love to scour the evidence looking for ways to say you were also at fault.
- The injuries were not caused by the accident. This is another common reason for a negative liability determination, especially in cases with pre-existing injuries or conditions. The insurance company will try to poke holes in your medical records or claim that your injuries existed before the accident and were not caused by it.
Further, traffic laws, like the right of way, can also impact fault determinations. For example, some car accidents, such as rear-end collisions, suggest fault. Suppose you are hit from behind. In that case, the other driver will generally be held responsible. Likewise, a driver making a left turn will likely be held accountable in the case of an accident because the cars in the lane they usually cross have the right of way.
Bad Faith Claim Denials
By law, insurance companies in California must act in good faith on behalf of policyholders—including conducting a prompt and fair investigation of claims and promptly paying for covered risks.
When an insurance company denies a claim that should have been paid as part of the coverage, this is called "bad faith." Examples of bad faith include:
- Not conducting a reasonable investigation of the claim;
- Failing to provide a timely response to your claim;
- Asking for information that is not necessary to determine coverage or liability;
- Unreasonably delaying payment of a valid claim;
- Refusing to defend their policyholder in a lawsuit where there is clear evidence of coverage;
- Making a lowball settlement offer without adequately investigating the damages.
Insurance companies may try to couch bad faith claim denials in various vague reasons and policy exemptions. Still, if an insurance company acts in bad faith, you have the right to sue them for damages in addition to what they should have paid.
What You Can Do If Insurance Issues a Negative Liability Determination
If an insurance company has issued a negative liability determination in your case, all is not lost. There are still ways to fight the decision and potentially get it reversed. Steps you should take now include the following:
- Gather all documentation related to your accident. This includes correspondence with insurance companies, police reports, medical records, and other relevant information.
- File a complaint with the California Department of Insurance. If you believe the insurance company has acted in bad faith, you can file a complaint with the California Department of Insurance. The DOI will then investigate your claim and take appropriate action against the insurance company if they find evidence of bad faith.
- Hire an experienced Los Angeles car accident attorney. An experienced lawyer will know how to investigate your accident, gather the necessary evidence, send demand letters, and build a solid case to get the insurance company to reverse its determination.
Fault in a vehicle accident can be a complex issue. Sometimes, it can be split between both drivers. Therefore, you will need an experienced lawyer to help prepare and present your case to ensure you are appropriately compensated or effectively defended.
If you were involved in a car accident in Los Angeles, contact us to review the details and legal options. You don't pay any fees unless we win your case. Injury Justice Law Firm offers a free case consultation.