Knowing the Reasons to Sue
There are many situations in which filing a lawsuit may be necessary to ensure that you recover benefits to which you are entitled. Some of the most common reasons that a person may need to file a lawsuit against his or her insurance company include:
Claim denial
The most common reason for filing a lawsuit against an insurance company is to appeal a claim denial. While policies do state general reasons that claims may be denied, such as fraud, dates of coverage and pre-existing conditions, insurance companies frequently deny claims arbitrarily and unfairly. When this denial leads to financial harm, a lawsuit may be warranted.
Overvaluation or undervaluation of a claim
Many times, an insurance claim may be valued by the insurer far below what it should be based on the actual losses suffered. For example , in life insurance cases, an insurance company may attempt to downplay the known health issues of a person who has died and subsequently filed a claim. These tactics are focused on keeping more money in the company’s hands instead of honoring its contractual obligations to its policyholders. When undervalued claims are ignored, a lawsuit can be needed to recover the benefits owed.
Bad faith
When an insurance company refuses to honor its obligations under an insurance policy, the company has engaged in bad faith. Under Florida law, a lawsuit can be filed for insurance bad faith to obtain the benefits for which a policy was created. Most insurers would prefer to settle cases rather than face an appeal, which often leads to a settlement being reached before the situation gets to that point.
Collecting Important Information
When pursuing a lawsuit against your insurance company, it is necessary to have all of the evidence in place to support your case. Some of the evidence can be presented in the form of documents, while others may be presented through the testimony of witnesses. Above all else, it is important to document all of your communications with your insurer, so you can reference them in the future if any disputes arise. This will help you track deadlines and notifications that are required on the part of the insurer, and is especially important should you need to make a case to the court that your insurer has not upheld its part of the contract. The contract itself will provide critical information into the legally binding agreement between your company and the insurer. Make copies of all contracts and print out anything that has been submitted electronically, as many policies contain emergency claims guidance. Knowing the language of your contract will allow you to have a better foundation upon which to build your claim. It is also important to have thorough documentation of the loss or damage. Accurate records keep track of the extent and impact the loss or damage has had on your facility or business. Take photos of the damage and the area surrounding it, and make sure to be thorough in your documentation to show what changes have occurred once any repairs have begun. All of this information is essential in creating a clear picture of the incident in the event you need to bring your case before the judge.
Speaking with a Legal Professional
Unless you happen to have an extensive background in insurance law, odds are you’re going to need to engage with a lawyer if you wish to sue your insurer. When you’re investigating your options for legal counsel, it’s important to select someone who focuses on insurance disputes. These attorneys generally have the background and experience necessary to traverse the various obstacles you’ll face during your lawsuit. However, with so many legal specialists willing to take your case, how do you whittle down your options to find the perfect attorney? The best way to start is to meet them face-to-face. It might seem slightly dated in this digital age, but speaking with a lawyer in person at their office helps to test their legitimacy. Ask them questions about their firm, any previous cases they’ve handled, how they foresee your suit playing out as well as any other concerns you may have about the process. Take careful notes during this meeting and keep them on file to refer back to later down the line. During your first meeting, you’ll also want to discuss whether or not the attorney will charge for their time while the lawsuit is ongoing. Many firms will only bill you by the hour once the case evolves into an impending settlement or trial, providing you with a great deal of flexibility when you’re deciding whether or not to pursue filing a lawsuit against your insurer.
Deliberating the Legal Action
When you reach this point in the process, you are probably feeling a lot of different emotions. Besides being skeptical of the process, you are likely feeling a little bit frightened, anxious, and maybe even confused. But filing a lawsuit should not be seen as a last resort.
If you have done everything possible to push your insurance company to do the right thing, but they refuse to budge on your claim, the time has come for a lawsuit. Filing a lawsuit against your insurance company is a complicated process and there are certain rules, and forms, you will be required to file with the court.
A complaint is a legal document that your lawyer will prepare with full knowledge of both the law and the facts of your case. In it, he or she will explain the nature of your complaint against the insurance company and what they expect the court to do about it.
Besides the complaint, you will also need to prepare other legal forms. The specific forms will depend on the type of case, the jurisdiction you are in, and the courts that have been given jurisdiction over your case. In most cases, these documents will include:
Once you have filed the complaint and served it on the insurance company (the complaint has to be given formally to the insurance company), a lawsuit has started. Each party must plead its case or perhaps bring a counterclaim up against the other party. This process may take 6-12 months.
You need to have all of your paperwork in order before taking any other steps, whether you are representing yourself or have hired a qualified attorney.
Comprehending the Litigation Procedures
The litigation process is a series of important steps that can be costly to skip or mess up. Understanding this process may help you come out on the other side of your case with the settlement you need.
The initial steps of the litigation process involve filing a complaint in court and sending copies of that complaint to your insurance company’s designated agent. Your insurer must provide a formal response within a defined time period determined by your state. Once your insurer’s response is filed, a period of discovery begins, during which you and your lawsuit opponent have the opportunity to gather essential information that will aid in your case .
Discovery might involve depositions, where you and your insurance company answer questions from each other in front of a court reporter, who then prepares a transcript of your responses, as well as production of documents relevant to your case. Following discovery, you might be able to settle your claim out of court during a mediation process, which could save you money and time. If no settlement is reached, your case will move forward into the trial stage, in which both sides present evidence to support their arguments. The verdict will then be decided by a judge or jury. If the verdict is in your favor, your settlement or award will be paid out. If your verdict or settlement is not in your favor, you may have the option to appeal, which will allow a higher court to review your case.
Possible Outcomes and Settlements
In most cases, the insurance company will end up settling the case before it goes to trial. Their bottom line is whether you’re willing to go to trial or not. Sometimes the motivation isn’t so much to obtain a victory, but to avoid the risk and disruption of a trial. An offer may come your way during the course of the litigation if the insurance company knows it’s either going to lose or not be able to win favorably enough in trial. The insurance companies do not want to go to trial either, especially in cases that involve significant repair costs and where the issues get really complicated.
The possible outcomes from a lawsuit against an insurance company include the following: A favorable settlement typically involves a favorable result for the insured prior to trial. It can still require the insured to expend some time, energy, and resources on the litigation. It’s generally worth it, however, if the settlement is favorable enough. Unfavorable settlements can happen and they’re no fun for policyholders. The good news here, however, is that the insured has the power to walk away from an unfavorable settlement.
An unfavorable judgment can happen at trial, but unfavorable settlements can also happen when the litigation is ongoing or during the course of the appeal. This can be uncomfortable for policyholders because unfavorable settlements almost always involve an adjustment downward from the amount the insurance company feels is owed.
Favorable judgments are what we all hope for. They’re the ones that require the insurer to live up to their end of the deal. Failing to do so can mean that the judge orders the insurer to make the payment anyway. The insurer can seek to counter the forced payment by an additional appeal, but the risk they take is that the appellate court could even increase the award. Policyholders are frequently placed in the uncomfortable position of deciding whether to agree to even more time-consuming litigation to collect what’s rightfully theirs.
Your attorney can help you determine which of these outcomes is best for you, and which is most likely.
Expenses and Timelines of the Case
The costs associated with filing a lawsuit against an insurance company can vary widely. Simple cases involving lower amounts in controversy will typically cost less than complex cases, or those with larger amounts in controversy. Each case is different, and costs involve the attorneys’ hourly rate, costs, trial lawyers’ general experience and expertise, geographic location of the parties, how far in advance attorneys and their support staff will need to work to prepare the case for trial, whether pre-suit demands are possible, etc. Legal fees are often incurred pre-suit, during litigation, in preparation for and during trial, and post-trial. The average time frame involved in an auto accident lawsuit, from the day that a client becomes represented until the day of verdict, is approximately two years. Other types of personal injury cases will typically take less time to conclude, and some types of cases may take longer.
Strategies to Improve your Odds of Success
While no one can absolutely guarantee that a lawsuit against an insurance company will be a success, there are several steps policyholders can take that will dramatically enhance their likelihood of a lawsuit’s success. These include: Keeping accurate, organized, and thorough records A vital aspect of the claims process is documentation, and this starts as soon as the claim itself begins. Keeping accurate notes of everything you do with regard to your insurance claim is critical – from the day you initially contact your insurance company all the way to when a claims adjuster visits your home and if necessary, the day you finally file a lawsuit. Anything you practice today that isn’t fully documented can easily be called into question later on. This makes it essential to keep accurate notes that capture the time and date of each interaction you have with your insurer, as well as the name and contact information for whoever you spoke to. Maintaining communication with your insurance company Though your insurer is responsible for keeping you updated on the progress of your claim, being proactive and demonstrating that you are a responsible, informing policyholder will go a long way. Communication is a two-way street: while you shouldn’t be afraid to contact your insurer when you have questions , comments or concerns about the claims process, they should also be just as willing to reach out to you to let you know what is going on. If your insurer fails to communicate or responds in a way that seems evasive or unprofessional, this is something else you should be sure to document. Providing your insurance company with your preferred means of communication – phone, email, text, etc. – will help them to get necessary information to you in a timely manner; conversely, making sure you include their preferred form of communication when contacting them will keep you from muddying the waters with an unnecessary amount of back-and-forth. In the end, communication is key. If there is something unclear about your notice or coverage, ask questions before proceeding. Being patient The legal process can be slow, particularly for those who have waited this long to take action against their provider. While this is often out of your hands, being aware of the potential time commitment will help you to stay in touch with your legal team and ensure that everyone is doing everything they can to move the case along. Regular updates from your attorney will help you to understand the current status of your case, and will likely even help you to manage your expectations for how long it may truly take to reach a resolution.