Can You Sue An Insurance Company For Not Doing Its Job?
Posted on: 12 November 2020
The idea of hiring an insurance litigation attorney and pursuing a lawsuit because the company rejected your claim can be appealing. It's important, however, to understand what might justify insurance litigation. An insurance litigation lawyer will likely tell you to consider the following five aspects of a potential case.
Disclosures
When you acquire a policy, the insurance company has to disclose whatever issues might impact your ability to collect on it. The disclosures must be reasonable, too. That means the insurance company can't impose terms that, for example, would make it impossible for you to collect under any circumstances.
Make sure you have a copy of your policy available. Verify that it is the most current version of the policy. Make copies of the policy, and store the original in a safe place. Present a copy to your insurance litigation attorney so they can then determine whether the policy disclosures are sufficient to support whatever actions the company took.
Process
The law understands that insurance claims have to go through a process. However, this doesn't mean an insurance company can just jam you up with processing and never pay out a claim.
Document all of your interactions with the insurance carrier. Take note of when you speak with the company, even if it is just briefly. In your notes, include small explanations of what the interaction was about.
Your goal is to prove to the court that you've given the process time. If the insurance company has spent months or years not paying out a claim, then you'll likely have a more credible argument for litigation.
Duty
Insurance companies have a duty to make a good-faith effort to pay all valid claims. When you submit a claim, document it thoroughly. Make copies of everything you send or receive. Also, verify in writing what the insurance company's logic was if it denied your claim.
Limits
All insurance policies have limits. It's important to understand what the limits on a policy are. Especially if you believe a claim was underpaid, this can help you to explain what the underpayment is and why you're upset.
Standing
Many parties have the potential to assert legal standing in insurance cases. Policyholders are the most logical ones because they paid for insurance to hedge their risk exposure. Beneficiaries also tend to have standing. Some third parties may also have standing, especially if they have financial stakes in the cases.
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