Suing Insurance Company for Denying Claim: A Step-by-Step Guide

If you're considering suing an insurance company for denying your claim, it's essential to understand the process and what's involved.

First, you'll need to review your policy to see if it includes a provision for disputing a denied claim. According to the Insurance Company's Denial Policy section, most policies do, but it's crucial to check yours.

Before filing a lawsuit, you should gather all relevant documents, including the denial letter, your policy, and any supporting evidence. This will help you build a strong case.

You'll also need to determine the statute of limitations for filing a lawsuit in your state, which can vary. The Statute of Limitations section explains that in most states, you have one to three years to file a lawsuit after receiving a denial letter.

If your insurance claim is denied, it's essential to know the reasons behind it. Insurance companies deny claims for various reasons, many of which are unjustified and contradict the policy terms.

Some common reasons for denials include the policy not being in effect at the time of the loss or the loss not being covered by the policy.

A loss may be specifically excluded from the policy, or claims may not be properly submitted to the company.

Claims submitted in a timely manner, but without pre-certification for treatment, may also be denied. Treatments and procedures that are not medically necessary can also lead to denial.

Fraud, arson, or other illegal activity causing the loss is another reason for denial. In some cases, another insurer may be responsible for the payment.

Here are some common reasons for insurance claim denials:

You can sue an insurance company if they deny your claim in bad faith. This means they refuse to pay or delay payment without a legitimate reason.

Lack of communication, refusal to explain claim denials, and offering significantly less than the claim's worth are all signs of bad faith.

If you're considering suing, gather evidence of the claim and denial, and consult with a bad faith claims attorney. They can help you determine if you have a case.

Some courts will issue a temporary order to pay some benefits while the matter is pending. This can be a good option if the insurance company is delaying payment.

You can also file a lawsuit against the insurance company for taking too long to pay. This can be a frustrating and time-consuming process, but it may be necessary to get the compensation you deserve.

A contingency fee structure is often used by insurance lawyers, meaning you won't pay upfront costs. Instead, your lawyer receives a percentage of the settlement or judgment.

Here are some potential outcomes of suing an insurance company:

It's essential to work with an experienced bad faith claims attorney who can help you navigate the process and achieve a favorable outcome.

You can try to file a lawsuit on your own against an insurance company, but be prepared to take on a team of well-funded and aggressive defense lawyers.

Every lawsuit is different, so the amount of time it takes from start to finish varies on a case-by-case basis.

Hiring a bad faith insurance lawyer often involves a contingency fee structure, meaning you won't pay upfront costs.

You won't pay any legal fees unless you get a settlement, and your lawyer will receive a percentage of the settlement or judgment.

Our insurance lawyers handle most cases on a contingent fee basis, meaning we don't charge any legal fees unless you get a settlement.

We get paid a percentage of the settlement recovery amount at the very end of the case.

Some cases are resolved quickly with settlement payments, while others take much longer if there are significant legal issues to be decided by the court.

Each judge and each court generally set their own case scheduling orders, which can affect how quickly your case moves forward.

The courthouse to file your lawsuit depends on a number of factors, including the type of claim, the amount of claim, and the insurance company being sued in the case.

As a policyholder, you have certain rights that are protected by law. The Texas Department of Insurance has developed a list of rights that insurance companies are required to provide to policyholders.

You have the right to fair and honest treatment when making a claim. This means that your insurance company should not misrepresent any material facts or policy provisions related to your coverage.

You also have the right to reject any settlement amount offered by your insurance company, including unfair or lowball offers. This is important because it gives you the power to negotiate a fair settlement.

If your claim is denied, you have the right to an explanation in writing from your insurance company. This explanation should clearly state the reason for the denial and provide any relevant information.

You have the right to refuse to provide your insurance company with information that is not relevant to your claim. This can help prevent your insurance company from gathering unnecessary information and delaying the claims process.

Additionally, you have the right to protection from discrimination. This means that your insurance company cannot discriminate against you based on your age, sex, or any other protected characteristic.

If your insurance company violates your rights, you have the right to sue them for bad faith. This can help you recover damages and compensation for any losses you have suffered.

Here are some of your key rights as a policyholder:

In New Jersey, there are laws in place to protect consumers from unfair insurance practices. The New Jersey Unfair Claims Settlement Act, specifically Section 17:29B-4, prohibits insurance companies from engaging in various types of misconduct, including misrepresenting policy provisions and failing to investigate claims reasonably.

Some examples of prohibited conduct under the UCSPA include refusing to pay claims without investigation and compelling insureds to institute litigation to recover amounts due. These laws aim to promote fair and timely settlements of insurance claims.

The New Jersey Insurance Fair Conduct Act (IFCA), enacted in 2022, allows motorists who make uninsured motorist/underinsured motorist (UM/UIM) claims to sue their insurance carrier for bad faith conduct. This includes unreasonable denial or delay of claims, as well as violations of the UCSPA.

Filing a claim can be a stressful experience, but knowing the deadline can help you stay on track. In New Jersey, the timeframe for filing a bad faith insurance claim varies by jurisdiction but generally ranges from one to four years from the claim denial date.

If you're unsure about the specific deadline for your case, it's best to consult with an attorney or check with the relevant authorities.

The New Jersey Unfair Settlement Act, also known as the UCSPA, was passed in 2013 to protect policyholders from unfair claims settlement practices by insurance companies.

Section 17:29B-4 of the UCSPA prohibits insurance companies from engaging in several types of misconduct, including misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue.

Insurance companies are also required to acknowledge and act reasonably promptly upon communications regarding claims arising under insurance policies.

Failing to adopt and implement reasonable standards for the prompt investigation of claims is also prohibited under the UCSPA.

Insurance companies must refuse to pay claims without reasonably investigating the claim.

They must also affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed.

If liability has become reasonably clear, insurance companies must attempt in good faith to effectuate prompt and fair settlements of claims.

Here are some examples of prohibited conduct under the UCSPA:

The UCSPA does not provide for a private cause of action, but violations of the UCSPA can support an insured's claim for bad conduct by his or her insurance company.

The New Jersey Fair Conduct Act provides a new layer of protection for motorists in the state. This law, signed by Governor Murphy in January 2022, allows individuals to sue their insurance companies for bad faith conduct when making uninsured motorist/underinsured motorist (UM/UIM) claims.

Under the IFCA, motorists can sue their insurance carrier in three situations: when their claim is unreasonably denied, delayed, or when the carrier violates the USCPA. The law enables motorists to seek damages including actual trial verdicts up to three times the coverage limits, pre-and post-judgement interest.

Motorists who believe their insurance company acted in bad faith can now sue under the IFCA. However, this law only applies to motorists who have filed UM/UIM claims with their carrier.

The IFCA allows motorists to seek reasonable attorneys' fees and reasonable litigation expenses. This means that if you're successful in your lawsuit, you can recover some of the costs associated with hiring a lawyer to represent you.

Here are the three situations in which motorists can sue their insurance carrier under the IFCA:

If you're a New Jersey resident dealing with a bad faith insurance claim, you're not alone. The New Jersey courts recognize that insurance companies often act in bad faith while handling claims. You may be entitled to compensation if your insurance company has handled your claim unfairly.

The experienced New Jersey insurance lawyers at Schiller, Pittenger & Galvin, P. C., can help you navigate this complex process. Their Scotch Plains office can be reached at 908-490-0444 or by email to schedule an appointment.

If you decide to file a lawsuit against your insurance company, you'll need to determine the courthouse where you should file. This depends on factors such as the type of claim, the amount of the claim, and the insurance company being sued.

If you're unsure about how to proceed, it's a good idea to consult with a team of experienced insurance lawyers. They can review your case and determine if you have the basis for a lawsuit.

Here are some key points to consider: