When you receive a letter from your insurance company saying your claim is closed, you probably think this is the end of the road. Regardless of the insurance company’s decision, you have to live with it.
That’s not necessarily the case, but what does “closed” really mean in this context, and what can you do about it?
What does Closed Mean in the Context of Insurance?
When an insurance company closes your case, it means they don’t want to continue to work on it. A closed claim is inactive, meaning no further action is being taken. They are not doing more investigation, are not going to pay you any more money, and have put it in the back of the file.
A closed claim does not mean the insurer has denied the claim. It means that the insurer does not feel it worth continuing to work on it. They have not, yet, refused to pay you. However, if you stay quiet and go away the claim will be forgotten and you will not get your money. You may, however, still see a rise in your premiums.
A case is also closed after a payout, in which case you may not want to reopen it unless you are unhappy with the amount or have incurred extra expenses from the accident.
Why do Insurers Close Claims?
The primary reason why the claim has been closed is that they have not heard from you in a certain period of time. This means it’s important to keep following up on a claim, so your insurer does not think (and can’t pretend) that you are no longer interested in pursuing the claim. Your claim may also be closed if you don’t provide the information they request in the time frame they request.
In other words, a claim is closed, rather than denied, if the insurer thinks that you are no longer pursuing it or are not serious about the claim, or if the insurer feels they have done enough on the matter (which might not gel with your opinion in this case).
Insurers may also close a claim for other reasons, and in some cases, they may close out a claim and, for example, total a vehicle without any further consultation. They do not legally have to tell you they are closing your claim, but reputable insurers will keep you in the loop. Your case may also be closed after a settlement, but you might want to reopen the claim if the settlement is insufficient, such as if you incurred more expenses after the settlement date. You might also disagree with the settlement.
What to Do if Your Claim Has Been Closed?
The first thing to do is communicate, through multiple channels, that you are still pursuing the claim. At least one of those channels should be in writing (email or snail mail) so you have documentation that you requested the claim be reopened. Calling as well makes absolutely sure that your insurer gets the message. Mail and email can be lost, so follow up and ask if they got it and resend if necessary.
In many cases, this will be enough to get them to reopen the claim. If you have new documentation related to the claim, such as medical records, make sure to send that over too. If the claim was settled, you will almost certainly have to present some kind of new information to get it reopened and seek increased damages. This might include medical bills for treatment received after the settlement date or repair bills for hidden damage traced to the accident.
If your case was closed without payment, then you can and should put some pressure on your insurer to reopen it. In some cases, insurers will do this to avoid outright denying a claim, which tends to result in a faster response and more of a fight. Letting a case sit closed can be a way an insurance company tries to weasel out of paying, although it can also be legitimately because you took too long to respond to a request for information.
What if They Refuse to Reopen the Claim?
In a few cases, your insurer may refuse to reopen the claim. In this case, you should talk to your attorney. (You should already have an attorney; it’s best to engage one as soon as the accident or incident occurs).
You can sue your insurer to reopen a claim if they have not paid you (and yes, you can sue if they deny the claim) or if you are unsatisfied with the settlement you received. Think carefully before suing your insurer if you already received a settlement; you can end up with more hassle than it is worth and possibly no increase in payment. Your attorney can advise you on whether it is worth pursuing the claim further.
You can and should sue if you think your insurance company has acted in bad faith, such as not paying a claim where the liability seems reasonably clear. You can also sue your insurance company for sitting on a claim and not approving or denying it within a reasonable timeframe; this may well be a course of action to take if they have closed a claim without payment and are refusing to reopen it, perhaps arguing there is not enough information.
It’s also possible to sue if they deny a claim and don’t tell you why; this is also a tack you can take when an insurer refuses to reopen a claim. In these cases, you are most likely suing for breach of contract. Most insurance companies will settle the claim rather than be taken to court, so often the threat of a lawsuit is enough, but you must be prepared to follow through. Don’t try to handle your own legal matters. You need expert help to get you through the process in a timely and reasonable manner.
How To Increase Your Chances of Getting Your Claim Reopened
There are a few things you can do that increase the chances of getting your claim reopened. Here are some of them:
- Provide any new evidence you have. Keep everything related to your claim and don’t be afraid to continue to forward new items and documentation while the claim is being adjusted. Be honest, and don’t try to argue expenses that didn’t exist. You might also need to send them fresh copies of the original documentation.
- If you haven’t heard from your insurer in a little while, follow up. Most especially, make sure to ask them if they received any information they asked for recently. Lost documentation can easily be mistaken for you not having bothered to send it.
- Document all of your correspondence with your insurer. In general, you should assume phone calls are being recorded. Take notes during those phone conversations, and always include who you were talking to. In some cases, issues with a claim can happen when people at your insurance company aren’t communicating. In other cases, your insurance company may claim you didn’t follow their protocols.
- Talk about expenses that have been incurred after the settlement. This can often happen with personal injury cases, where delayed damage can be discovered months later.
- Do not sign any kind of release or waiver unless and until you are completely happy with the payment or settlement received. Once you have signed a release it can be nearly impossible to get the claim reopened. You might have to sign the form before receiving payment, but again, don’t do so unless you’re happy with the settlement amount. Insurance companies will often put a lot of pressure on you to sign these forms quickly. Also, don’t sign if you are still receiving medical treatment.
- Follow your insurance company’s protocols to the letter when it comes to documenting and filing your claim. They will pounce on any mistake as an excuse not to reopen the claim.
- Hire an insurance law attorney. While it’s best not to be too intimidating, you should not try and fight this on your own. In many cases, insurers will be more willing to play ball when a lawyer’s name is on the letter, as they don’t want to end up going to court and paying the expenses related to that. Always remember that while insurance companies don’t like paying claims, they like time in court even less.
You may not be able to get your claim reopened if statutory limitations have expired, or if your policy has been renewed since, so make sure that you make your request to reopen the claim promptly, as soon as you receive the letter closing it.
It can appear that a closed case is a final decision, and indeed insurance companies often hope a claimant will go away after receiving one. However, it is usually possible to get your case reopened, and sometimes a simple request is enough. When it is not, Herman Wells can help. Contact us for a free legal consultation and to find out how we can help you get your insurance claim reopened and get the compensation and damages you need and deserve.