Does a policyholder have any recourse when their insurance company fails to handle their claims properly? You could sue and take the company to court, but this plan of action should be your last resort.
Disputing an insurance offer is rarely a simple matter. It will take time and patience to settle issues that are multifaceted. If you believe that you haven't received reasonable compensation or have had your claim denied, there are a few options to consider prior to making the determination to go to court.
Even though your claim may seem straightforward, your insurance claims adjustor is managing many things at one time while endeavoring to settle your claim. If it seems to you that the adjuster working on your case is biased or uncooperative, request to speak to a supervisor. If you find no satisfaction there, continue up the chain of command. Be sure to take note of the names of everyone you speak with as well as the dates and times of the conversations. Although going through all the channels (including appeals) does take time, it can make a difference in benefiting your case if you do end up filing a lawsuit.
Make Sure You Have a Case
Before seeking a lawyer, take an unbiased look at your accident and claim. For example, is there proof to corroborate the amount of reimbursement that you’re requesting? Confirm that the amount of money you are asking for is realistic and evidence-based.
Is the Insurance Company Working with You in Good Faith?
Auto insurance companies have an obligation to act in “good faith” when responding to a claim. If the company attempts to avoid paying a claim, it is termed acting in “bad faith.”
The following actions by your provider would be indicative of "bad faith" dealings:
- Denying your claim without cause or sufficient data.
- Withholding important information concerning the claim.
- Greatly delayed payment of a claim.
- Grossly underpaying the claim
- Refusal to negotiate a claim.
After making every attempt to resolve matters with the insurance company on your own, a lawsuit may be your only remaining option for relief. If you believe your auto insurance company has acted in bad faith, and you’ve made no progress toward resolution by moving up the chain of command, consult an attorney. Be aware that you should understand the process and the consequences of filing a bad faith lawsuit.
If you are genuinely contemplating a lawsuit against your insurance company, know that the company will have legal representation. Likewise, you should, too.
Prepare and make inquiries before hiring an attorney. Locate someone who has experience working with auto insurance companies. A lawyer can inspect your claim and present an objective opinion. If you make threats to file a lawsuit, be sure to have an attorney before you do so.
Communication With Your Provider After the Suit is Filed
Filing a lawsuit will alter the relationship you have with your auto insurance agent. Once a lawyer is involved, the insurance representative will not communicate with you about the matter any further. More problems will arise if you have other policies with the company.
Write to your provider to request that lines of communication remain open about other matters exclusive of the lawsuit.
So You’ve Filed. What’s Next?
An experienced attorney will walk you through the process required to seek a judgment against your insurance carrier. Be advised that these steps can be time-consuming and expensive.
You may be required to provide the insurance company's attorney a statement during discovery. The discovery process allows lawyers from both sides opportunity to gather all salient and pertinent facts about the case.
Costs incurred along the way may be your responsibility. Paying for things like travel expenses, filing fees, and court costs may fall completely to you. These costs may be significant; be prepared and budget wisely.
Lawsuits can take years to reach a resolution. Don't plan on a quick payout. You should never rely on a future settlement to satisfy your current living expenses.
Decide carefully if a settlement is better than a judgment. A majority of lawsuits are settled via a settlement and never see the inside of a courtroom. Weigh your lawyer's advice about an offer made and make the decision that's right and best for you.