When an Insurer Denies a Teen Driver's Accident Claim

Attorney Answer

A denial is not final until the insurer puts it in writing and tells you exactly why. California's claims regulations require it to do that, and the written reason is what tells you whether the denial is beatable.

Your inquiry does not say what reason the insurer gave, and the reason is the whole case. So start by forcing it into writing.

Under Cal. Code Regs. tit. 10, § 2695.7(b), an insurer has 40 calendar days after receiving proof of claim to accept or deny the claim in whole or in part. Under § 2695.7(b)(1), where an insurer denies or rejects a first-party claim, in whole or in part, it must do so in writing and must give the claimant a statement listing all bases for the denial and the factual and legal bases for each reason then within the insurer's knowledge. Where the denial rests on a specific statute, applicable law, or a policy provision, condition or exclusion, the written denial must reference it and explain how it applies to the claim. That last sentence is the one to quote back to them: a one-line refusal does not satisfy it.

Under § 2695.7(b)(3), the written notification must also state that if you believe all or part of the claim has been wrongfully denied, you may have the matter reviewed by the California Department of Insurance, and it must give the address and telephone number of the unit that reviews claims practices. Under § 2695.7(c)(1), an insurer that needs more time must give written notice within the 40 days and then every 30 calendar days until it makes a determination. Section 2695.7(d) requires a thorough, fair and objective investigation, and prohibits persisting in seeking information not reasonably required for or material to resolving a claim dispute. Under § 2695.7(l), no insurer may deny a claim based on information obtained in a telephone conversation or a personal interview unless that conversation is documented in the claim file.

Denials of this kind commonly turn on who was covered rather than on what happened: whether the young driver was listed on the policy, whether an exclusion was signed for a particular driver, whether the vehicle involved was on the policy, whether the coverage at issue was actually purchased, or whether the policy was in force. Which of those applies is exactly what the written denial has to tell you, and it is not something to guess at.

What you can do

1. Ask the insurer, in writing, for the denial in writing with every basis stated and the policy language it relies on identified and explained. Reference Cal. Code Regs. tit. 10, § 2695.7(b)(1).

2. Ask, in the same letter, for a complete copy of the policy, including the declarations page and every endorsement, and for a copy of any signed driver-exclusion form.

3. Note the dates: when the claim was reported, and whether any written decision or more-time notice arrived within 40 calendar days, as § 2695.7(b) and § 2695.7(c)(1) require.

4. Keep every repair estimate, medical record and bill, and do not throw anything out because the claim was denied.

5. File a complaint with the California Department of Insurance. Under Cal. Code Regs. tit. 10, § 2695.5(a) a licensee has 21 calendar days to furnish the Department a complete written response.

6. Ask a local attorney to read the denial letter against the policy. Most lawyers offer a brief initial call at no cost, and a few minutes on your specific facts with someone who handles these cases in your area is worth more than any general guidance, including this page.

⏱ Time limits apply. One protection is worth knowing about now: under Cal. Code Regs. tit. 10, § 2695.7(f), except where a claim has been settled by payment, an insurer must give a claimant written notice of any statute of limitation or other time period it may rely on to deny a claim, at least 60 days before the expiration date, and at least 30 days where the matter involves an uninsured motorist. That subsection does not apply to a claimant represented by counsel. Separately, if the driver was under 18 and was injured, Cal. Code Civ. Proc. § 352(a) provides that time spent under the age of majority is not counted toward the period for bringing an action — but a claim under a policy carries its own deadlines that this tolling rule does not necessarily change. Which deadlines apply here depends on facts this page does not have, so have a local attorney review them.