California car insurance company widely accused of unfair claim denials

Car insurance - Claims Denied

Residents of Southern California say National General is leaning on a loophole for denials

National General policyholders in Southern California have sued their car insurance company with accusations that the insurer is using a loophole to be able to get out of paying claims.

The policyholders say the insurer allegedly saves millions this way

The lawsuit alleges that National General is using a loophole so that it will not be required to fulfill many of the claims that its policyholders file.

Car insurance - Sue - auto insurance company - California

According to a recent report in NBC LA, one of the car insurance company’s policyholders filed a claim after her 2011 GMC Yukon was totalled when she was driving at night and smashed into a light post in Corona in order to avoid an animal that had darted out in front of her. In that case, Jennifer Darconte, the driver, contacted the insurer and was surprised to learn that this situation wasn’t covered, and she wouldn’t be receiving a payment for her damaged vehicle.

According to Darconte, the insurer informed her that the reason for the denial was that when she initially applied for her policy, she didn’t disclose that she had a 14-year-old son.  To be clear, the son was not the person driving the car.

The car insurance company allegedly denied the claim and then canceled the policy

In the aforementioned media report on this topic, a team investigated Darconte’s story and Allstate, the parent company of National General, said that the claim had been “denied after thorough review.”

The California Department of Insurance informed that team that it isn’t abnormal for an insurer to require a policyholder to disclose other household members, even children or teenagers who are not drivers, for the purposes of underwriting.

Building a legal case

“They’ve set up a corporate process that allows them to get out of paying thousands and thousands of claims after the fact, based on information they never asked for at the beginning,” said attorney Justin King.

King also stated that the online application process at National General wasn’t clear, asking only that an applicant list all drivers. That said, King said that later in the car insurance application, the digital form asks that the applicant confirm that all members of the home older than 14 years have been disclosed.  As this wasn’t requested in the first place, and as the question auto-fills to “yes,” King said that this could be confusing or easily overlooked.

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