·  Legal News, Analysis, & Commentary

Lawsuits & Litigation

Can You Sue Your Insurance Company for Denying a Claim?

— December 1, 2021

An expert will be able to tell you if you have a legitimate claim or not. If you do, they can help you through the process of holding your insurance company accountable.

Filing an insurance claim is never fun. The aftermath of an accident, whether related to your vehicle, home, or body, is spent trying to recover damages. Insurance is there to help us out in emergencies, but the long process to getting compensation can be bumpy. We rely on our insurance company to do the bulk of the work for us, and we hope they have our best interests in mind.

Types of Insurance Claims

Car Insurance Claims

Car insurance is there to cover you in the event of a car accident, but it doesn’t just pay to repair your vehicle. Most policies cover any damages related to the accident, such as injured people or damaged property.

Homeowners Insurance Claims

Homeowners insurance protects your property if it’s damaged, such as from a fire, flood, or theft. You can file a claim to replace damaged appliances, furniture, and pretty much anything else on your property.

Health Insurance Claims

After your visit to the doctor, the doctor’s office submits your medical bills to the insurance company in order to get paid. If your doctor is outside of the insurance network, you may have to file the claim yourself.

Life Insurance Claims

When your loved one passes away, you can file a claim with their life insurance company in order to receive compensation. This is to help you cover the costs of the funeral, burial, and lost wages.

Workers Compensation Claims

Workers’ compensation insurance is legally required to be covered by your employer. In the case of an injury, your workers’ compensation will kick in to cover your medical bills and a percentage of lost wages.

Legitimate Reasons a Claim May Be Denied

One of the most common reasons an insurance claim may be legitimately denied is if the monthly premium payments were not being made. Depending on the insurance company and type of policy, you may be able to retroactively make payments and reinstate your policy. Another common reason that claims are legitimately denied is if there’s a lack of evidence for the claim.

Even when payments are made, every type of insurance policy has specific rules. For example, life insurance policies often require you to disclose medical conditions. If the person who died did not disclose any preexisting medical conditions, the claim made on their behalf could be denied.

What is Bad Faith Insurance?

When an insurance company fails to pay a settlement as promised in their policy, they are acting in bad faith. Insurance companies have a “duty of good faith” that holds them accountable to certain standards.

Man screaming into telephone; image by Icons8 Team, via
Image by Icons8 Team, via

Firstly, they must have equal consideration for the claimant’s interests and their own. They also must provide a reasonable and prompt investigation into the claim. Next, they must provide a fair application of the policy terms, interpreting the language of the terms accurately. Lastly, the insurance company must promptly pay valid claims.

Examples of Bad Faith Insurance

Your insurance company may have acted in bad faith if they:

  • Deny your claim without explanation
  • Delay your payment
  • Make changes to or cancel the existing policy
  • Stop communicating with you
  • Underpay you with no explanation
  • Don’t properly investigate the claim
  • Refuse requests for documentation of the claim
  • Coerce you to make a statement that supports denial

Holding Your Insurance Company Accountable

If your insurance company has acted in bad faith, you can sue them. However, you should first set up a free consultation with an insurance bad faith lawyer, who may be able to negotiate a good outcome without a lawsuit. Depending on the type of insurance, you can also file a complaint with your state. For example, if your California health insurance claim is denied, you can file a complaint online.

The best thing to do is to speak with a lawyer who specializes in bad faith insurance. An expert will be able to tell you if you have a legitimate claim or not. If you do, they can help you through the process of holding your insurance company accountable.

Join the conversation!