Filing a policy claim with your insurance company can be a difficult and intimidating process. Many people feel pressured and helpless when a massive insurance corporation refuses to pay on a policy, and think there is no way to contest it. However, coverage companies must obey the law like everyone else. Sometimes insurance claim process does not work the way it should. Many insurance companies deny claims that should be approved or settle for less money that the insured deserves. It is important to know your rights to sue an insurer. Here are the steps on bringing a suit against your insurance company:
- Contact the insurance company and get a copy of your coverage policy.
- Make sure that your loss is covered in your policy.
- Research the laws of your state regarding insurance law.
- File a claim with your state's department of insurance
- Hire an attorney and take your coverage company to court
- Try to settle outside of court or take the insurance company to trial if you need
What Are the Steps After my Insurance Company Denied my Claim?
There are many strategies your insurance company will use to deny your claim because they do not want to give you a payout. The insurance company may claim that the accident was your fault or the policy does not cover your claim Regardless of the reasons they try and deny your claim. You can sue your insurance company for denying your claim without a good reason to do so. Here are the steps after your claim has been denied:
- Request that they send, in writing the denial and detailed reasons as to why the claim was denied. It is important to try to get everything you can in writing, for two reasons:
- In case of a lawsuit, obtain a detailed report of your transactions so you can use as evidence.
- Get all the documentation you can from the company. A company engaged in potentially questionable practices (such as bad faith) might be more hesitant to document its actions. Asking for documentation may cause them to approve the claim.
Next, file for an immediate appeal or administrative hearing with the insurer. While it is unlikely that the company will reverse its own decision, it is essential that you do this to comply with the terms of your insurance policy to exhaust all available remedies.
What If My Appeal Was Turned Down?
Remember to ensure your policy actually does cover the damage you are dealing with, as many people wrongfully assume that they are covered when they are not. For instance, many people mistakenly think that homeowner's insurance covers flood damage, only to be left without coverage when a flood damages their home.
When Can I Sue My Insurance Company?
There are many reasons insurers will sue their insurance company. Understanding the reasons you can sue your coverage company, and the process for bringing the suit itself will help you if you find yourself in this frustrating situation. Here are some reasons you can sue your coverage company:
- Contract Breach Lawsuits: If your coverage company failed to follow the service policy agreement, all you must prove is that the company did not follow the terms of your policy. Many states have laws that construe ambiguous terms in a contract in favor of the policyholder. However, most states limit breach of contract damages only to the value of the actual contract. They can also sometimes grant you out of pocket expenses you incurred because of the insurer failing to pay, and may allow attorney's fees as well.
- Bad Faith Lawsuits: they allow for many more types of damages than simple contract breaches, including consequential, mental or emotional distress damages, and, if the company's conduct was egregious, punitive damages.
- Low Settlement: Sue your insurance company if they try to settle your claim for an unreasonably low amount of money when your claim is much higher.
- Denies Your Claim: Sue your insurance company if they unreasonably deny your claim.
- Failed to Defend You: Sue your insurance company if they failed to defend you in court which violated the insurance policy agreement
The standard of proof is also much higher when you are trying to sue an insurance company, as you must prove the company acted in "bad faith." A legitimate dispute or disagreement over coverage or benefits will likely not give rise to a bad faith claim.
Do I Need a Lawyer?
All insurance companies have a team of lawyers who defend them and it is highly recommended for you to hire an experienced lawyer to help you with your claim. If you may have a legal case against your insurance company, you should contact an experienced business attorney. Your lawyer will help you understand the likelihood of winning a lawsuit against your company.