What to Do When Your Insurance Company Refuses to Pay for Your Car Accident

 Posted on January 13, 2026 in Car Accident

You pay your insurance premiums every month. You followed the rules. You filed your claim after a car accident. Then your insurance company denies your claim or offers far less than you need to cover your medical bills and car repairs. This situation happens more often than most people realize, and it leaves accident victims feeling helpless.

Insurance companies are businesses focused on profits, not people. When they refuse to pay valid claims, they act in bad faith. You do not have to accept their decision without a fight. Our San Jose personal injury attorney offers free consultations to accident victims facing unfair insurance denials in 2026. We believe in helping our community succeed against powerful companies that put profits before people.

Why Do Insurance Companies Refuse to Pay Car Accident Claims?

Insurance companies use various tactics to avoid paying claims or to pay less than they should. Understanding these strategies helps you recognize when your insurer is treating you unfairly.

Delaying Your Claim

One common bad faith tactic is unnecessary delay. Your insurance company may take weeks or months to investigate your claim even though the facts are straightforward. They might request the same documents multiple times or claim they never received paperwork you already sent. These delays create financial pressure, hoping you will accept a low settlement just to get some money.

Lowball Settlement Offers

Insurance adjusters often make initial offers that are far below what your claim is worth. They count on accident victims not knowing the true value of their injuries and damages. A lowball offer might cover your car repairs but ignore your medical expenses, lost wages, and pain and suffering.

Denying Valid Claims

Sometimes insurance companies simply deny legitimate claims. They might say the accident was your fault when evidence shows otherwise. They might claim your injuries are not related to the accident. They might argue that your policy does not cover certain damages even though it clearly does.

Using Your Statements Against You

Insurance adjusters may call you shortly after your accident asking for a recorded statement. They phrase questions in ways designed to get you to say something that hurts your claim. For example, if you say you feel okay when they ask how you are, they may later claim you admitted you were not injured.

What Is Bad Faith Insurance Under California Law?

California law protects consumers from insurance companies that act in bad faith. Under California Insurance Code Section 790.03, insurance companies must investigate claims fairly and honestly. They cannot unreasonably delay processing claims or deny coverage without a proper basis.

Bad faith occurs when an insurance company fails to properly investigate your claim, denies a claim without reasonable justification, offers unreasonably low settlements, refuses to communicate with you, or fails to explain why they denied your claim.

When an insurance company acts in bad faith, it may owe you more than just your original claim amount. You might be entitled to compensation for emotional distress and even punitive damages that punish the company for their misconduct.

What Should You Do If Your Insurance Company Refuses to Pay?

If your insurance company denies your claim or offers an unfair settlement, take these steps to protect your rights.

Document Everything

Keep copies of all communication with your insurance company. Save emails, letters, and notes from phone calls including the date, time, and name of the person you spoke with. Document all expenses related to your accident including medical bills, repair estimates, rental car costs, and pay stubs showing lost wages.

Do Not Accept the First Offer

Insurance companies expect you to negotiate. Their first offer is almost never their best offer. Do not feel pressured to accept a settlement that does not cover your full damages.

Ask for Written Explanations

If your claim is denied, ask the insurance company to provide a written explanation with specific policy language supporting their decision. Sometimes insurance companies cannot provide legitimate reasons for denials because their decision was made in bad faith.

Avoid Recorded Statements Without an Attorney’s Help

You generally must cooperate with your own insurance company's investigation, but you do not have to give recorded statements to the other driver's insurance company. Even with your own insurer, having an attorney present protects you from saying something that could be misinterpreted.

Call a San Jose, CA Personal Injury Lawyer Today

An attorney who understands insurance bad faith tactics can level the playing field. Insurance companies take claims more seriously when an attorney is involved because they know you are prepared to fight for fair compensation. Our Santa Clara County car crash lawyer at Fuller Law Firm has helped countless residents fight back against bad faith insurance tactics and win the compensation they deserve. 

We offer free consultations because we believe everyone deserves access to justice regardless of their financial situation. Call Fuller Law Firm at 408-234-7563 today to discuss your case and learn how we can help you succeed against the odds.