My Insurance Company Did Me Dirty. Can I Sue?

by Jim Thompson | Last Updated: February 4, 2021

If you have ever been involved in an automobile accident, you may have become frustrated by the glacial pace at which things progressed toward you receiving a settlement. It only took seconds to endure your loss; why does it take weeks (or months) to put the matter right? Haven’t you made faithful payments for the life of the policy. It should be easier than this, right?

Despite what you may think, an insurance company’s first allegiance is to its stockholders, not its policyholders. After all, it is a for profit entity. Does a policyholder have any recourse when their insurance company fails to handle their claims properly? You could file a suit and take the company to court, but this plan of action should be your last resort.

Disputing an insurance settlement offer (or the lack of one) is rarely a simple matter. It will take time and patience to settle the multifaceted issues involved. If you believe that you haven’t received reasonable compensation or have had your claim denied, there are a few options to consider before determining to go to court.

Be Patient

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 and 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:

If you are convinced that your company is acting in bad faith, what recourse do you have?

Seek Counsel

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. Before consulting an attorney, be sure you understand the process and the consequences of filing a bad-faith lawsuit.

If you are contemplating a lawsuit against your insurance company, you should obtain legal representation. You can be sure that your insurance company will.

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. Don’t attempt to litigate a suit independently; hire an attorney to do so on your behalf.

Communication With Your Provider After the Suit is Filed

Filing a lawsuit will drastically alter the relationship you have with your insurance company. After a suit is filed, the company transforms from a potential ally to a definite adversary. Once legal proceedings have started, you will no longer have the ability to communicate with your insurance company about the matter directly. Filing a suit will also complicate matters if you have any additional policies with this provider.

For your protection, you may, and probably should, 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 the opportunity to gather all salient and pertinent facts about the case.

Be advised that costs incurred along the way may ultimately become your responsibility. Paying for things like travel expenses, filing fees, and court costs may fall completely to you. These costs may be high; be prepared and budget wisely.

Lawsuits can take years to reach 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 resolved 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.

If you have more questions about what to do after a crash, check out our After Accident Guide.