What To Do When Your Insurance Company Won't Pay

Each year, the National Association of Insurance Commissioners (NAIC) compiles a list of the most common complaints that consumers have with their insurance providers. The list is a compilation of records from state insurance departments, which are one of the primary tools that individuals can seek help from when they feel an insurance company isn't treating them right.

Key Takeaways

  • If you've been refused an insurance payout, or have been treated unfairly or feel like you've been defrauded by an insurance company or one of its agents, you have some options.
  • The NAIC is a federal agency that handles customer complaints in the insurance industry. Many states additionally have their own agencies.
  • Make sure to keep detailed records of your interactions with the insurer you are fielding a complaint against and keep all of your related documents.
  • In complex cases, you may want to enlist the services of a lawyer who specializes in this type of complaint.


Not surprisingly, the vast majority of complaints stem from issues regarding the handling of claims, which is the reason that people take out insurance in the first place. As of June 2021, data from the NAIC report states that just over 18% of all complaints stemmed from delays that policyholders experienced when waiting to receive a claim. Unsatisfactory claim amounts offered by an insurance firm were the next most frequent complaint and accounted for just over 13% of all complaints. The denial of a claim accounted for just over 12.5% of all complaints.

It's also worth pointing out which types of insurance have the most complaints. The results are not surprising as accident and health insurance disputes are the most common, accounting for just over 41% of complaints. Auto is the next highest category at just over 30.5% and is followed by homeowners at over 15%. With life and annuity complaints at about 8%, the list drops off to more minor complaints.

Knowing the largest proportion of complaints per insurance category is important for consumers. For instance, be on high alert when you have a health insurance claim to make and stay equally vigilant when you have an auto or homeowners claim. Below are four steps to take to fight against an insurer who is delaying paying your claim, has denied your claim, or has made what you feel is a low-ball offer to settle your claim.

Keep Pristine Records

When it comes to claims, the work you did before an accident occurred can be vitally important. In regard to insuring the contents in your home, it helps to keep receipts and records of your possessions, especially the more expensive assets. One industry source suggests taking a tour of your home and recording all of the contents with a video camera and then keeping the video in a safe place outside of your home, such as at the office or in a safe deposit box. And when it comes to disputing a claim, keep a very detailed record of whom you talked to, when, and what was discussed.

Shady insurance firms go out of their way to make the claims process difficult, so evidence to prove their elusiveness can help your case immensely.

Take Advantage of the State Regulator

Taking an insurance company to court should be used as a last resort as it can tie up a claim in court for many years and seriously delay receiving needed funds to replace a home or pay medical bills. The first steps are to attempt to work directly with your insurance agent or insurance firm provider in a calm, patient manner—documenting the entire process all the while. If they end up proving difficult to work with, utilizing the services of a state insurance regulator can help move the process forward.

Know Your Insurance Policy and Rights

A thorough review of an existing or new insurance policy will offer some of the best insight into what's expected if an individual needs to make a claim. Details on what is covered, what needs to be done to file a claim, how quickly a claim must be submitted, and what the process is to estimate damage reimbursement amounts are all contained within.

Having an attorney's help during a deposition where an insurance firm interviews you to get details about an accident or the value of possessions in the case of property & casualty insurance can be a good idea, especially if the amounts are sizable. Equally important is knowing what your rights are in the case of a dispute, which should also be detailed in a policy or a discussion with your agent, insurance provider, or state regulator.

Be Persistent

At its worst, encountering difficulties in getting an insurance firm to honor their claims obligations can be an extremely frustrating and time-consuming process. The vast majority of cases should be much more straightforward, and most claims and disputes are actually handled correctly and ethically by insurance firms. But when challenges do arise, individuals must stay on top of their insurance provider with frequent follow-ups and the thorough documentation of the entire process.

The Bottom Line

Studies also exist that rate individual insurance providers, so it may be a good idea to do a background check on your current provider and refer to these studies when searching for a new provider. Again, most insurance claims are handled properly and in a timely manner, but it helps to be aware of the challenges you might encounter if the process doesn't go as smoothly as it should.

Article Sources
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  1. National Association of Insurance Commissioners. "Closed Confirmed Consumer Complaint by Reason."

  2. National Association of Insurance Commissioners. "Closed Confirmed Consumer Complaint by Coverage Type."