You can sue your insurance company if they violate or fail the terms of the insurance policy. Common violations include not paying claims in a timely fashion, not paying properly filed claims, or making bad faith claims. Thankfully, there are many laws designed to protect consumers like you, and it’s not uncommon for a policyholder to sue his or her insurer.
Dealing with property damage, injuries, death of a loved one, or some other misfortune is hard enough. So, if you’re forced to battle your insurance company on top of all that, it’s easy to feel overwhelmed. Read on to learn about the basics of suing your insurance company for denying your claim or other misconduct.
An insurance company has an arsenal of reasons to give you for denying your claim, some legitimate, some not. Some of the more common reasons include:
Every insurer has many obligations to its policyholders. They must abide by the terms of the contract (the policy), act in good faith, and avoid unfair trade practices. Their precise duties vary from state to state, since the insurance industry is generally regulated at the state level. However, these obligations typically require the insurance company to refrain from the following:
If you believe your claim was improperly denied and your insurer doesn’t seem to be budging, you can look into suing your insurance company. However, you should also think about contacting an insurance attorney before your claim is denied if you think your insurance company is being unfair. Sometimes the presence of an experienced insurance professional can help persuade the company to better honor its obligations and agree to a fair settlement.
Again, each state has its own statutes and case law regulating the insurance industry, and these include the types of lawsuits you can bring against an insurer. Every state allows for a breach of contract action since your insurance policy is a type of contract. Many states also allow you to pursue a bad faith tort lawsuit. Additionally, you may be able to sue under your state’s unfair trade practices laws. Many states have codes or statutes which pertain directly to trade practices within the insurance industry.
An insurance attorney can explain the kinds of damages available to you, since each state has different rules about the types of damages you can pursue in a given lawsuit. However, compensatory damages, such as medical expenses and lost wages, are available in each of these kinds of lawsuits. On the other hand, punitive damages are only available in some cases and may be limited by state law or the court.
Whether you’re currently considering suing your insurance company or not, it’s always best to be prepared and keep detailed records. Some ideas to keep in mind include:
If you do decide to sue your insurer, having this sort of documentation will help your attorney present a strong case.
If you’re at the point where you’re thinking of suing your insurance company for denying your claim or committing other misconduct, it’s time to look for a local insurance attorney who can defend your interests. You’ve already had to deal with the events giving rise to the insurance claim in addition to the headache of an uncooperative insurer. Plus, you can bet that the insurance company will be well-equipped with their own team of experienced lawyers doing everything they can to defend their client. Level the playing field by contacting an insurance attorney today.