Defending Your Rights: How to Challenge an Insurance Company’s Refusal to Defend

April 11, 2025

Car insurance is an essential purchase for anyone who drives. Despite that fact, many people aren’t quite sure how their insurance works. If you’ve ever been sued for an accident, you might already understand the insurer’s duty to defend, a fundamental right for policyholders.

An insurance company’s duty to defend is a contractual obligation to provide you with a lawyer if you’re sued for an accident. However, some less-than-scrupulous insurance companies may refuse to defend you for unclear reasons.

A refusal to defend can be stressful, but, fortunately, you can challenge the insurer’s decision. Here’s a closer look at how.

If you have an active car insurance policy, your insurer is obligated to provide you with legal representation if a claim is filed against you. However, there are some exceptions — and some insurers may refuse to defend you for unclear reasons.

The Insurer’s Duty to Defend: A Fundamental Right

Your car insurance policy is a contract between you and your insurance company. In exchange for your premium payments, the insurer owes you the following duties:

• Duty to Defend: Provide you with legal representation in the event of a lawsuit
• Duty to Indemnify: Pay for covered claims and/or court judgments.

Although both are fundamental duties, they differ in scope. The insurance company’s duty to indemnify doesn’t mean that it must pay all claims unquestioningly; it may refuse to pay if there is reasonable evidence the loss isn’t covered.

The duty to defend is somewhat broader than the duty to indemnify. Even if the insurer has doubts about the claim’s validity, it must cover the policyholder’s legal costs up to the policy limits.

This broader scope is essential because of the way insurance claims and lawsuits work. If you’re sued by another driver, you need a strong legal defense immediately — not after your insurance company has conducted a months-long investigation of the claim.

Facing a lawsuit can already be damaging to your reputation. If your insurance company were not required to promptly provide you with legal representation, you might have to pay legal costs (and even the plaintiff’s damages) out of pocket. Car accident cases can cost hundreds of thousands of dollars or more, so covering these expenses yourself could easily lead to financial ruin.

Recognizing a Wrongful Refusal to Defend

Understanding Bad Faith Insurance Tactics

Not every refusal to defend is wrongful. Your insurance company might reasonably refuse to defend you in these situations:

• You intentionally caused an accident.
• The accident happened before your coverage began or after it ended.
• Your insurer has already paid up to your policy limits.
• You caused the accident under the influence of alcohol or other drugs.

Insurance companies also might refuse to defend you if you caused an accident while using your vehicle in a way your policy doesn’t cover. For example, to drive for a rideshare company, you must have an additional insurance endorsement that allows you to use your car for business. If you cause a crash without the endorsement, your insurance company will deny your claim.

If your insurance company is refusing to represent you, an experienced lawyer may be able to help. Call Doug Terry Law at 405-463-6362 for a free consultation.

Unfortunately, not all refusals to defend are legitimate. Insurers can and do wrongfully refuse to provide legal representation. These are some common tactics:

Misinterpreting Policy Exclusions

The language used in insurance policies can be challenging for the average person to understand. Unethical insurers use that to their advantage. They may deliberately misconstrue their own policy terms to trick policyholders into thinking they aren’t covered.

If you receive a denial letter containing very convoluted language, your insurer might be wrongfully refusing to defend you. A lawyer experienced with insurers acting in bad faith can assess the denial and help you decide what to do next.

Claiming Late Notice

Most insurers require you to report all accidents that could potentially lead to a claim. The exact deadline varies by policy, but usually you have about a week. You might be exempt from this requirement if your report was delayed by a major injury.

Sometimes an insurer might falsely claim that you waited too long to report an accident in an attempt to avoid paying for legal representation.

Alleging Non-Cooperation

Insurance companies that want to avoid paying for legal representation (or paying claims) might falsely accuse you of not cooperating with requests for documentation or other elements of the claims process.

Steps to Challenge a Refusal to Defend

Asserting Your Rights Against Unethical Insurers

If your insurance company is unfairly refusing to defend you, you can begin challenging the refusal with these steps:

• Review your denial letter and seek clarification if needed.
• Document all communication with the insurer.
• Cite specific policy provisions in an effort to get the insurer to reconsider.
• Consult an attorney.

An attorney with experience in bad faith insurance cases can significantly improve your chances of a positive outcome. Insurance attorneys see through bad faith insurance tactics, and insurance companies know that. Your lawyer can help you build a strong case and then attempt to negotiate with the insurance company.

Legal Options for Enforcing the Duty to Defend

If negotiation alone doesn’t work, your attorney can help you pursue legal action. One option is seeking a declaratory judgment, which in this context is a court order stating the insurer has a duty to defend you.

You also may choose to file a lawsuit for breach of contract. If the denial was especially unreasonable, a lawsuit for bad faith insurance handling might be the better option.

Why Choose Doug Terry Law?

Insurance companies have skilled attorneys guiding their every move. If you’re challenging an insurer, you should have experienced legal guidance of your own. That’s where Doug Terry Law comes in.

Doug Terry began his career as an attorney representing insurance companies before he decided to focus on defending the rights of people wronged by their insurance companies. He understands how insurance companies think, and he’s ready to put that knowledge to work for you.

Stand Up to Unethical Insurance Companies

All too often, policyholders don’t challenge a wrongful refusal to defend, either because they think they don’t have the right to do so or because they assume any challenge is futile. You have the right to a legal defense, and our firm is ready to help you assert that right.

Dealing with an unfair refusal to defend? Don’t wait — call Doug Terry Law at 405-463-6362 or message us online to set up your free consultation.