Can the insurance company deny my comprehensive damage claim because they have been unable to speak with relevant parties (not myself or anyone on my policy)?

Asked on October 15, 2014 under Insurance Law, Michigan


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

They are allowed to *delay* the claim while they attempt to do a full investigation, such as by speaking with other parties, so long as the delay is reasonable; however, they cannot deny it simply because they cannot speak to other parties. Rather, they can only deny it if the claim appears to be 1) outside of the coverage specified in the policy, 2) you failed to pay premiums, or 3) fraudulent in some way. If they cannot locate or speak to other involved parties, it is possible that is making them think there is something fraudulent about the claim (e.g. if they can't locate the other parties, maybe they don't exist and the story you told the insurer is fabricated), but if you disagree with their determination, you could file a lawsuit against them for breach of contract (not honoring their contractual obligations--the insurance policy is a contract) to force them to pay.

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