Suing an insurance company is no longer considered an alien trend. They should be sued if they violate the terms of the policy one holds with them. These violations include delayed payment of claims, making lousy faith claims, and missing to pay for filed claims. Lucky for you, numerous law firms are willing to protect you from such issues proving it is common for individuals to sue their insurance holders.
In this article, we touch on the basics of using an insurance company, and the correct route to take. We understand how straining it may be to deal with the legal process while still recovering from a loss. It is hard enough to have lost a loved one, let alone struggling with the court proceedings with your insurer for violation of contract terms.
Reasons Why an Insurance Company May Deny Your Claim
There exist numerous reasons as to why an insurance company may decide to deny your claim. Some of these claims are according to the law, while others are not. Below is a list of some common reasons why such action may be taken against your claim.
Lack of Coverage
The insurance company may argue that the loss incurred did not fall under your insurance company. To be safe, we recommend you examine your contract carefully to understand better what is covered. Note that ambiguities in the agreement fall in favor of the policyholder.
Filling your insurance application form is an underrated process that haunts most policyholders in the long run. The insurance company can deny your claim if they notice errors in your original application. Giving false information that results in misinterpretation of the contract is an example of a typical application error most individuals make.
When claiming compensation, ensure you follow guidelines as per the contract. For example, some agreements require notifying the insurer within twenty-four hours. Any claim made past the stated timeframe will be denied.
Insurance fraud involves submitting false information and may make an insurance company deny your claim. In addition to denying a claim, it carries civil and criminal consequences.
When To Sue Your Insurer for Denying a Claim
It is every insurer’s responsibility to act accordingly as per the policy. In the event any party violates the insurance contract, legal action needs to take effect. In the following, we shall address some scenarios that make it ideal for suing an insurance company.
Inadequately Investigated Claim
As you might know by now insurance companies are looking out for their interest, before anything else. So, there might be instances where the investigation is conducted in bad faith. One of the most common ways of inadequately investigating a claim is to delay it without proper justification.
The duration of an investigation claim varies based on the state. Generally, it could take between 30 and 45 days, but it usually ends up being less. However, there are cases where the insurance company delays proceedings. If they do need more time for a valid reason, they have to send you a written notice. Some reasons that count as valid are:
- missing information
- complex case
- liability disputes
Claim Denied Where Liability Is Clear
You might find that your claim has been denied, although the liability was clear. Unfortunately, this is not an uncommon practice. This instance occurs most often in rear-end car accidents. Even if the client filed a complete folder with all the necessary documentation, the verdict might not be in their favor.
If you find yourself in this situation, you can take action against the insurance company. The most important thing is to contact a lawyer who will fight by your side and for your best interest, unlike the insurance company. To learn more about how an attorney can help visit onmyside.com.
Claim Denied without a Clear Explanation
An insurance company can’t just deny a claim without first conducting an investigation. Also, they must inform the client of the reason for the denial. If the motives to justify the denial of your claim are not clear, contact a lawyer. They will analyze your case and determine if there is sufficient ground to sue the provider.
If your claim has been denied in the case of application misstatement despite the past period of contestability you might have sufficient reason to sue the insurance company.
In the case of life insurance, if the policyholder dies within a certain period after the policy was released, the provider can review the application. If the investigation brings to light some missing or inaccurate information, the insurance company can challenge and deny the benefits. However, they must do this within a fixed period. The length of the contestability period varies between states, but in some cases, like New York, it extends to 2 years.
So, if the denial of your claim was issued past the contestability period of your state, do not hesitate to contact a lawyer and take the appropriate legal steps to defend your right to compensation.
What Happens When Suing an Insurance Company
The first action from both parties when suing your insurance company is to get legal representatives. Your goal is to find an experienced and qualified lawyer to represent you adequately. The insurer’s lawyer and your representative will conduct a discovery investigation entailing the sharing of fact findings.
Both of you will incur costs on the court, experts and travel fees. Despite the charges, your attorney’s role is to protect you at all times; it falls under your contract. Your case will proceed to trial if no settlement is reached. In court, you will testify as a witness, and the procedure might take years. In the long run, mediation discussions will be the last of your case.
Seeking a qualified attorney before suing an insurance company is the best approach to take. They will advise you on what route to take, and how to strengthen your argument.