Most of us can agree that dealing with insurance companies can be frustrating. Since they are in business and want to make a profit, they will look for any excuse to deny your claim or pay out the minimum possible amount of money in compensation.
When they deny or undervalue your damage, they will try to get you to accept the settlement as fast as possible. You are even more vulnerable if your claim is based on a severe natural disaster such as floods where many people are filing for compensation at the same time.
For instance, when Hurricane Harvey wreaked havoc in 2017, more than 30,000 people filed for claims with their respective insurance companies. In such a case, most insurance companies will find a way of denying as many claims as possible to minimize their losses.
But the big question is; what do you do when your insurance company wrongfully denies your claim? Do you simply forget everything and move on with life, or do you seek redress through other means? Can you sue your insurance provider for denying your claim?
Read on to find out everything you need to know about suing an insurance company if they deny your claim.
Reasons Why Insurance Company May Decline Your Claim
Before you start thinking about how you will sue your insurance provider, you need to know why they rejected your claim. Typically, insurance providers have a wide range of reasons to give whenever they deny a claim. Some are legit; some are not. Some of the common reasons include:
- Application errors: An insurance company can claim that you made errors or misinterpretations in your claim that nullified the claim or the policy altogether.
- Lack of coverage: Your insurance provider may also argue that the policy doesn’t cover the damage specified in your claim. This is the primary reason why you need to examine your policy exclusions thoroughly to understand what is covered and what isn’t covered. In most cases, ambiguities in the policy document are judged in favor of the policyholder, not the insurer.
- Insurance fraud: Insurance companies consider submitting exaggerated or false claims as insurance fraud. Apart from being denied, such crimes also carry civil and criminal consequences.
- Claim errors: Before you file a claim, check your policy documents to see the requirements for notifying your provider of a claim. Some policies require you to file a claim within 24 hours of the incident. If you file a claim past the stipulated timeframe, the insurer will automatically deny it.
- Bad faith: Almost all insurance contracts underwritten in the United States include an implied covenant of good faith. It means that the insurance provider agrees to act honestly and fairly in its dealings with you.
Therefore, if your provider declines your claim, they will not mention bad faith as the reason for denial. Instead, they will give you a myriad of other reasons explained in technical insurance jargon just to hide the fact that they don’t want to compensate you for your claim.
Can I Sue My Insurance Company for Denying My Claim?
The simple answer is “yes.” If you believe that the insurance company has violated the terms of the insurance policy, then you have every right to seek legal redress. Some of the common violations that insurance companies commit include failing to pay properly filed and genuine claims, not paying on time, and making bad faith claims to deny your claim.
However, before you file a lawsuit against your insurance provider, make sure you read and understand the set of laws and statutes that regulate the insurance industry in your state. This will determine the kind of lawsuit to file against the company. Every state allows consumers to pursue bad faith torts and breach of contract claims.
You should also consult an experienced insurance attorney who will assess your situation and advise you accordingly. Pursuing the matter on your own can be quite tricky because you are already struggling with massive emotions, stress, and pain. Therefore, it is always a good idea to let an insurance attorney handle the matter on your behalf.
Filing a Lawsuit against Your Insurance Company
Before you rush to court to file a lawsuit against your insurance provider, it is good to be prepared for the battle ahead. Keep in mind that the insurer will hire the best attorneys and throw everything they have got at you just to make sure they win the lawsuit.
Take time to gather all the necessary documents and follow a proper process. Also, notify the insurance company of your plan to file a lawsuit against them as it is your responsibility as the insured to notify them when a covered incident occurs.
The other things you need to do include:
- Request your insurance company to provide you with a copy of your insurance policy document if you don’t have it.
- Send a properly written letter to your insurer requesting them to send, in writing, their denial of your claim and reasons why they declined your claim. Make sure you have a copy of the claim you filed as well.
- You can do another letter demanding that the company pays your claim and give it a reasonable amount of time to respond to your demand. Sometimes, the insurer may yield to your demands and offer a fair settlement.
- If your demand letter yields nothing, talk to your insurance attorney and let him/her proceed with filing a civil lawsuit against the insurance company.
How Can an Insurance Attorney Help You?
One thing you must keep in mind is that without the help of an insurance lawyer, the process of suing an insurance company can be quite long and complicated. Therefore, ensure you hire one to increase your chances of success.
Have you or your loved one suffered an insurance claim denial and wondering what to do next? Contact Legal Giant today, and we shall connect you with an experienced insurance lawyer with decades of experience to help you with your case. Our attorneys know different strategies and tactics they can use to win the case against your insurer.
We are dedicated to providing you with the best possible legal representation possible. Talk to us today and let us help you with your case!