Are Closed Insurance Claims Really Closed?

At some point during an insurance claim, you can probably expect to see a letter from your insurance company saying something like: “We are now closing our file” or “This will conclude your claim.”  These statements are hardly ever true.

Many people interpret a letter closing their insurance claim file as the end of the road, and believe that they have to live with the insurance company’s decision, whatever it was.  But, when an insurance company says that it is closing your file, the insurance company really means that it doesn’t want to do anything else on the claim (no more investigating, no more payments).  But policyholders can still make their insurance companies take further action, whether it’s during the claim or in a lawsuit.

When we first reach out to insurance companies for new clients, we often get a response that says the insurance company has “reopened its claim.”  Even if the insurance company previously said the claim was over, by reopening the claim, the insurance company agrees to consider more information and possibly change its earlier decision.  And many times insurance companies do change their earlier decisions – paying claims that were denied, or agreeing to pay more on claims that were paid too little.

Sometimes insurance companies refuse to reopen closed files.  That still doesn’t mean you can’t question the company’s decision.  Whether a claim is “open” or “closed” doesn’t matter legally for whether you can dispute a claim denial or ask the insurance company for additional payment.  In most cases, you have five years from the date of loss to file a lawsuit.

“Closed” and “open” are just words that an insurance adjuster puts in a letter.  If you aren’t completely happy with the outcome of your insurance claim, don’t let a “closed file” letter stop you from challenging the insurance company’s decision.