The role of an insurance company is to protect you by providing coverage for things like injuries or damage to property. However, there are cases where an insurer doesn’t live up to your expectations and fails to provide the coverage you enrolled for.
If your insurer denied your claim, there are options to explore, including suing an insurance company for denying a claim.
Can You Sue an Insurance Company for Denying Your Claim?
The answer is yes, but only in certain circumstances. There are legitimate reasons for denying a claim, and not every denial is grounds for a lawsuit.
However, your policy is a legally binding agreement. If your insurer fails to meet the terms of this policy, you are well within your rights by filing a lawsuit.
For instance, an insurer can breach this legal agreement if they deny a claim that falls within what the policy covers. You can also file a lawsuit if your insurance company misses the deadline for issuing a payment or breaches the agreement in any other way.
When Can an Insurance Company Deny a Claim?
Your insurer can deny a claim in different scenarios:
- You didn’t pay your premiums and let the coverage lapse.
- You are filing a claim for something that isn’t covered by your policy. For instance, auto insurance policies cover the drivers named on the policy but aren’t valid if you lend your vehicle to someone else.
- You provided false information when purchasing coverage or filing a claim.
- You missed the deadline to report the incident to local authorities or didn’t file a claim in time.
- After conducting an investigation, your insurer finds that you are liable for the incident and don’t qualify for a payout.
- Your insurer can also contest things like what caused your injuries after an investigation. For instance, the insurance adjuster can find that your injuries were pre-existing.
- Your insurer can also dispute the extent of your injuries or the extent of the property damage.
- If you’re unable to provide evidence of the extent of the injuries or damage or can’t prove who is at fault, your insurer could deny your claim.
How Do Insurance Companies Deny Claims?
After you file a claim and pay your deductible, your insurer will review and investigate the claim. The purpose of the investigation is to make sure that what happened falls under your policy.
In some cases, your insurer will dispatch someone to inspect the damage in person. It’s a common practice for home insurance claims.
Insurance companies often work with mechanics who can issue statements explaining how much damage your vehicle sustained for auto insurance claims. When it comes to medical claims, insurers rely on the expertise of the healthcare providers who treat you.
An insurance adjuster will either inspect the damage in person or review the proofs submitted by different professionals. They will assess whether your policy covers the incident or injuries and determine how much the insurer will pay you.
The adjuster can decide to issue a lower amount or to deny the claim if their investigation finds that the claim doesn’t fall within what your policy covers.
What Can You Do When a Claim Is Denied?
Finding out that your insurer is denying your claim can be devastating and stressful. However, you should know that you have options.
You can file an appeal with your insurer and ask for a review of the adjuster’s decision. You can also file a complaint with the state agency that regulates insurers where you live.
If your insurer isn’t willing to review their decision, your next step should be to file a lawsuit.
How Do I Fight a Denied Insurance Claim?
Before you can think about suing an insurance provider for denying a claim, you need to take a few steps to show that you have tried working with the insurer.
You have a right to request an internal appeal. Write a letter to your insurer to ask for an appeal. There are rules and regulations in place that require insurers to review appeal requests in a timely manner, especially for health coverage claims.
You can also ask for an external review. Each state has an agency that regulates what insurers can and can’t do. This entity also has the authority to act as a neutral third party when reviewing denied claims. After reviewing the evidence, your state agency can determine that your insurer has to pay the claim they denied.
Legal representation can give you an advantage when sending a claims appeal letter or reaching out to your state’s regulatory agency. You will also need a lawyer if you decide to file a lawsuit to have a judge review the denied claim.
How to Sue an Insurance Company
Start by gathering all the evidence you have. You’ll need all the documents showing what happened and proving the extent of the damages or injuries. Your goal is to prove that your claim falls within what your policy covers.
You’ll also need a copy of the claim you filed and a copy of your appeals letter, if applicable.
You should reach out to your insurer and ask for an internal review. You’ll get a letter explaining why the insurance company denied your claim. You’ll need this letter during the lawsuit.
Depending on where your insurer operates, you can then file a lawsuit with a federal or state court. You can sue your insurer for bad faith, negligence, emotional distress, breach of contract, or even fraud.
Who are the Lawyers that Sue Insurance Companies?
When suing an insurance provider for denying a claim, it’s best to work with a specialized attorney. An insurance claim lawyer is someone who specializes in this type of case.
The insurance industry is a heavily regulated market. You can benefit from working with a specialist who knows about these regulations. Plus, insurance claim attorneys have advanced negotiation skills and can sometimes come to an agreement with your insurer before going to court.
What Can You Sue Your Insurer For?
You can file different types of lawsuits against your insurance provider. Note that you can sue your insurer for more than one thing.
Suing an Insurance Company for Negligence
From a legal point of view, negligence is a failure to act or meet the terms of a legal agreement. In some cases, you can sue an insurer for gross negligence, which is a failure to act that results in a disregard for safety.
You can sue your insurer for negligence or gross negligence if they took actions or failed to act in a way that resulted in damages for you:
- If your insurance agent fails to provide the coverage you requested or didn’t inform you of the available options, you can sue for negligence.
- There would be a basis for a negligence lawsuit if your insurance agency failed to explain what your policy covers or lied about it. If they lied about your coverage, you could sue for misrepresentation.
- You can also file a negligence lawsuit if your insurer didn’t perform their duties. It includes failing to respond to a claim or appeals letter or not conducting a proper investigation.
- If your insurance provider failed to notify you that they’re facing insolvency or didn’t let you know your policy was about to expire, you could sue for negligence.
Can I Sue My Insurance Company for Emotional Distress?
Emotional distress is the result of intentional actions or negligence that results in a strong emotional reaction, such as anxiety, anguish, or humiliation.
Suppose the denied claim made it difficult to recover after an accident or caused anxiety while you were dealing with a serious health condition. In that case, you can sue your insurer for emotional distress.
You should also consider suing for emotional distress if your insurer made it challenging to request an appeal or didn’t treat you with courtesy during this process.
Suing Insurance Company for Bad Faith
A common type of lawsuit against insurers is bad faith lawsuits. Bad faith refers to dishonest practices, sometimes with fraudulent intent.
You can file a bad faith lawsuit in the following scenarios:
- Your insurer denied or delayed your payout without being able to give you a valid reason.
- Your insurance company didn’t respond to your claim or appeal.
- The adjuster didn’t conduct a proper investigation.
- The adjuster asked for additional proof, even though they already had all the information they needed.
- Your insurer failed to explain why they denied the claim and has been uncooperative.
- Your insurance company says your claim doesn’t fall under what your policy covers, even though you have sufficient coverage.
Contact Stoy Law Group
Having your insurer deny your claim can be stressful and discouraging.
However, you should know that you have options available. You can reach out to your insurer and request an appeal, file a complaint with your state’s regulatory agency, and file a lawsuit.
If you decide to file a lawsuit or need help with navigating the appeals process, having an experienced insurance claim lawyer by your side can make a significant difference.
At Stoy Law Group, denied insurance claims are one of our specialties. Contact us for a free initial consultation to find out if your denied claim is grounds for a lawsuit!