How to Sue an Insurance Company After an Auto Accident

//How to Sue an Insurance Company After an Auto Accident

How to Sue an Insurance Company After an Auto Accident

After a car accident, your first priority is your health. However, once you have received medical treatment, your priority may focus more on filing an injury claim seeking compensation for your losses and damages. However, what happens if the insurance company refuses to a fair settlement for your injury claim? Do you know how to sue an insurance company for failing to pay a valid claim filed against an insurance contract?

How to Sue an Insurance Company After an Auto Accident

  • Read the Insurance Contract
  • Document All Communication Related to Your Auto Accident
  • Document Your Injuries
  • Document Expenses and Losses
  • File a Settlement Demand
  • Contact a Personal Injury Lawyer to Discuss Your Case

Can I Sue an Insurance Company for Denying My Claim?

After a car accident or Utah motorcycle accident, you may have several options for filing a personal injury claim. You may have a claim against the liability insurance coverage for the other driver if that driver is responsible for causing the car accident in Utah. You may have a claim against your insurance policy if you have uninsured motorist coverage or underinsured motorist coverage, depending on the circumstances of the car accident. Once you determine the company that is liable for your injury claim, you can work with a claims adjuster to settle the claim.

However, what happens if the claims adjuster tells you that your injury claim is being denied for lack of insurance coverage? Do you have any recourse against the insurance company if the denial of your settlement offer is in bad faith? Do you know how to sue an insurance company for bad behavior?

What is a bad faith claim against an insurance company?

“Bad faith” is a legal term used to describe a specific situation in which an insurance company denies a valid claim without a reasonable cause.

An insurance company may deny a personal injury claim for several reasons. Common reasons why an insurance company may deny an auto accident claim include:

  • A dispute regarding fault
  • The claim exceeds the insurance policy limits
  • Insufficient evidence of damages and losses
  • Insurance contract does not cover the accident
  • The insurance coverage has lapsed for non-payment
  • The claim was filed after the statute of limitations expired
  • A policy exclusion applies to your injury claim
  • The insurance policy did not cover the person or vehicle

The above reasons are often valid reasons for denying an insurance claim. However, a car insurance company may use these reasons in bad faith to deny a valid injury claim. An insurer may also use fraudulent reasons to deny insurance coverage. An insurance company should be able to provide a reasonable, valid explanation of why it denied an injury claim. When a company cannot provide a valid reason for denying a claim, you need to explore how to sue an insurance company.

What are the Elements of a Bad Faith Insurance Claim?

How to sue an insurance company using the legal argument of bad faith.

If an insurance provider knowingly acts unreasonably to deny a claim it knows is valid, the company may be guilty of bad faith. The insurance law related to bad faith claims differ slightly by state. Some states have statutes that govern a bad faith insurance lawsuit. However, many states also allow for common law bad faith claims when an insurer breaches the implied covenant of good faith and fair dealing associated with an insurance agreement.

In most cases, you must prove at least two primary legal elements to be successful in a bad faith claim:

  • You had a valid claim under the terms of the insurance policy that the insurance company denied. Depending on the laws in your state, you may need to submit a written final settlement offer to the insurance company even after your claim is denied before you can file a bad faith insurance lawsuit.
  • The reason given by the car insurance company for withholding payment was unreasonable. In most states, the evaluation of whether the denial was unreasonable is based on the facts and the situation at the time the claim was denied. Negligence may not always be sufficient to prove an allegation of bad faith.

The actions by an insurer that might constitute bad faith also vary by state. Some common actions by an insurance provider that could lead to allegations of bad faith include:

  • Failing to approve or deny an insurance claim within a reasonable time from the date that the claim was initially filed;
  • Misrepresenting the provisions or terms of the insurance policy;
  • Failing to investigate a filed claim properly;
  • Failing to provide a reasonable explanation for the basis used to deny a claim or return a counteroffer to settle a claim;
  • Failure to settle a claim when liability is reasonably clear or not an issue;
  • An insurer that refuses to confirm whether coverage applies to a claim;
  • Attempting to settle a claim based on a policy that was intentionally altered without the knowledge of the insured;
  • Requiring claimant to submit to unreasonable medical tests or examinations;
  • Requiring a claimant to obtain and submit forms of other documents that are not reasonably required to process a claim;
  • Using intrusive, harassing, fraudulent, or illegal methods of investigation;
  • Forcing a claimant to pursue actions against other parties when there is no legal or contractual basis for this demand;
  • Intentionally withholding information that would be in favor of the claimant;
  • Canceling a policy for the sole reason that a claim was filed against the insurance coverage;
  • Deviating from standard policies and procedures to avoid payment of a valid claim; and,
  • Using what should be an unbiased procedure, such as an independent medical examination, in a biased manner to fraudulently reduce or deny payment of a claim.

In general, if an insurer denies coverage because of a mistake or error while assessing the claim, the instance does not qualify as bad faith if the company has a reasonable explanation for making a mistake. In most cases, the actions of the insurance provider must be intentional to qualify as bad faith.

What to Do If an Insurance Company Will Not Pay Your Claim?

  • Read the Insurance Contract

It is important that you are aware of your legal rights and your responsibilities as a policyholder. Carefully read the entire insurance contract, including policy riders and amendments. You also need to be aware of the terms, conditions, and restrictions for your insurance coverage. Because insurance contracts can be complicated and difficult to understand, you may want to consult a personal injury attorney who can review the contract and provide legal advice regarding your rights and responsibilities.

  • Document All Communication Related to Your Auto Accident

It is important to prove that you attempted to work with the insurer to resolve your injury claim and that the insurer did not act in good faith to settle a claim. Documenting each step in the settlement process, including documenting all communication between you and the insurance company is crucial.

Make sure that you take detailed notes of each conversation with an insurance agent, claims adjuster, insurance investigator, or other representative for the insurance company. Also, make notes regarding contact with any third parties regarding your claim. Keep copies of all written correspondence, including printing emails related to your personal injury claim.

  • Document Your Injuries

You must also document your injuries. Medical records are typically the best form of documentation regarding physical injuries. However, taking photographs of your injuries throughout your recovery can also be extremely helpful in proving the severity of your injuries. Maintaining a pain and suffering journal can help prove the noneconomic losses such as physical pain, emotional distress, mental anguish, and loss of quality of life.

  • Document Expenses and Losses

The economic damages sustained because of an accident can be substantial. To recover economic losses, you must have proof of your losses and expenses. Economic losses include, but are not limited to, medical bills, loss of income, travel expenses, personal care, assistance with household chores, medications, medical equipment, physical therapy, and cost of pursuing a personal injury claim (i.e. attorneys’ fees and court costs). You should keep copies of all medical bills, invoices, and receipts related to any expenses or financial losses that are related to the accident, your injury, and your recovery.

  • File a Final Settlement Demand

You need to submit a final written settlement offer to the insurance company after you complete medical treatment. A settlement demand consists of a formal letter to the insurance provider summarizing your damages, detailing the legal cause for liability, and demanding a specific sum to settle the personal injury claim. Because it can be difficult to calculate the value of an injury, it may be best to consult a personal injury lawyer before you submit your final settlement offer to ensure you are requesting full compensation for all damages and losses.

Additionally, it can be complicated learning how to negotiate with an insurance adjuster. An insurance adjuster is a trained and skilled negotiator who protects the insurance company’s best interest. They always seek to pay as little as possible to settle an accident claim.

An Important Note — Do not accept a settlement offer until your doctor has released you from care and provided an impairment rating. Once you settle your claim, you release the insurance provider from further liability for your injuries and damages. In other words, even if you discover that you have additional damages, you cannot require the company to pay those losses. Therefore, it is important to wait until you complete your medical treatment to submit a settlement demand.

Another Very Important Note — If your injuries are severe and you continue to receive medical care for an extended period, you need to consult a personal injury attorney immediately. Your time to file a lawsuit is restricted by law. If you fail to file a lawsuit before the statutory deadline, you lose your right to any legal remedy against the insurance company.

  • Contact a Personal Injury Lawyer to Discuss Your Case

If the insurance company denies your claim or offers to settle for an amount that is far below the value of your claim, you need to discuss your claim with an experienced personal injury lawyer. The insurer is not required to explain your legal rights to you. The insurance company is also not going to protect your best interests. It is your responsibility to protect your legal rights and best interests. One of the best ways to do that is to seek counsel and legal advice from an attorney who has experience handling personal injury claims and bad faith claims against insurance companies. An attorney can explain how to sue an insurance company and other options you may have for recovering compensation for your injuries, damages, and losses.

What Can You Do If Your Insurance Claim is Denied?

Learn how to sue an insurance company for bad faith!

In some cases, a company may deny an automobile insurance claim because of an error or mistake. If that is the case, hiring a personal injury attorney to address the matter with the company often resolves the issue. However, if the company is acting in bad faith, you may have an additional legal claim against the company for bad faith. If so, you need an attorney’s assistance in filing a separate cause of action for bad faith.

In a bad faith insurance lawsuit, you may recover what should have been paid under the original personal injury claim. You may also recover consequential damages or damages that occurred because the claim was denied, such as attorneys’ fees and court costs. Some states may allow individuals to recover compensation for noneconomic damages, such as emotional distress, caused by having the claim denied unreasonably.

In a few cases, punitive damages may also be awarded. If a person can prove that the insurance provider recklessly and intentionally acted in bad faith, the court may award punitive damages. Punitive damages are rare and typically reserved for cases involving egregious conduct by the insurer.

Do You Need More Information About How to Sue an Insurance Company After an Auto Accident?

If you have questions about an auto accident claim, insurance lawsuit, settlement offer, insurance coverage, breach of contract, or how to sue an insurance company, contact the personal injury lawyers of Acadia Law Group for a free consultation. Call 1-800-653-4600 or start your free case review now.

2019-08-02T20:02:23+00:00