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UPDATED: Mar 13, 2020
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Ideally, your auto insurance company should be your advocate and partner. They should help you get your life back on track after an accident by paying for medical expenses and repair costs, and they should help you deal with other insurance companies. Unfortunately, while this is often the case, insurance companies are sometimes at odds with their customers. They may deny a claim, refuse to pay the true value on a vehicle or otherwise react unfairly to a claim. In these situations, you may wonder if you can sue your insurance company to get the money you deserve.
Luckily, it is possible to take an insurance company to court. Depending on the situation, it may be necessary to pursue this action, but bear in mind that there will be consequences. Before taking your insurance company to court, you must understand that there are no guarantees that you will win the case, and the court proceedings could be expensive.
Reasons to Take an Insurance Company to Court
Before suing your insurance company, it’s important to look objectively at the situation and make sure that pursuing legal action is appropriate. You may be angry about the way something in your claim has been handled, but that doesn’t necessarily mean you will win the case. If your claim is denied due to lack of coverage, an excluded driver or other reasons, you will not be able to recover any funds for the loss even if you sue.
Having a claim denied or being low-balled for damages is not sufficient reason on its own to warrant a lawsuit. You must be able to prove that the insurance company was negligent or otherwise at fault for the situation. For example, if you believe that you were unfairly accused of fraud and can reasonably prove that your actions were honest, it may be worthwhile to pursue a lawsuit. It may also be worth suing if you were misled to believe something about your policy or a claim and that information turned out to be damaging or incorrect.
Before taking the insurance company to court, be sure to exhaust all of your options with the company itself. Most insurers are eager to settle disputes out of court, and if you make your complaints heard, they might be willing to work with you. For example, you can dispute liability or a settlement amount.
Once you dispute the claim, the insurance company will forward your concerns to a specific committee that will review the situation and see what they can do. If they review your concerns and still deny the claim, then filing suit may be a valid option.
How to Take Your Insurer to Court
Before filing a lawsuit, your last stop should be to register a complaint with the Department of Insurance (DOI). This group monitors the actions of insurance companies and provide insurance regulation. They may fine companies that act inappropriately, or they might levy more serious consequences against them. Insurance companies are eager to smooth over difficulties before they reach the DOI.
After reporting the situation to the DOI over the phone, contact your insurance company to let them know that you’ve made a report. Be sure to speak with a supervisor and carefully explain why you’re upset and what you’ve done to correct it. In many cases, the insurance company will work to solve the problem before it gets worse.
If the insurance company persists after the DOI complaint has been filed, it’s time to seek legal counsel. An attorney specializing in insurance laws will be invaluable when preparing your case. He or she will review the facts of the case and let you know if it’s worthwhile pursuing the lawsuit. If there is no way to win, the attorney will be honest with you about your chances and you can save the time and money that would be lost in the lawsuit if you lose.
If the case is valid, the attorney will help you prepare the case and walk you through the court process. Each situation will be different, so it’s a good idea to review the information that they provide you with and follow any directions they may give you for preparing the case. This will maximize your chance of winning the lawsuit.