What Happens If You Sue Your Own Insurance Company?
Suing your own insurance company is a significant step, often a last resort after attempts at resolving a claim amicably have failed. While it might seem counterintuitive to sue the entity designed to protect you, it sometimes becomes necessary when disputes arise over coverage, the amount of a settlement, or the handling of a claim. Let's explore what this process entails.
What are the common reasons for suing your own insurance company?
This is a crucial question, as understanding the grounds for legal action is paramount. Common reasons include:
- Bad faith refusal to pay: This is a serious accusation, alleging your insurance company deliberately and unreasonably denied a legitimate claim. Proof often involves demonstrating the company ignored clear policy terms, failed to properly investigate the claim, or acted with malice.
- Unfair settlement offer: If your insurer offers a settlement far below the actual value of your losses—be it property damage, medical expenses, or lost wages—you might consider legal action to obtain fair compensation.
- Unreasonable delays in processing claims: Excessive delays, especially when they cause undue hardship, can provide grounds for a lawsuit. This often involves proving the delays were intentional or grossly negligent.
- Breach of contract: Your insurance policy is a legally binding contract. If the insurance company violates the terms of that contract—for instance, by failing to provide the coverage explicitly promised—you can sue for breach of contract.
What is the process of suing your insurance company?
Suing your insurer follows the standard legal process, although specific steps can vary by state. Generally, it involves:
- Filing a lawsuit: You'll need to file a complaint with the appropriate court, outlining the reasons for the lawsuit, the damages suffered, and the relief sought (e.g., monetary compensation).
- Discovery phase: Both sides gather evidence, including documents, witness testimonies, and expert opinions. This phase can be lengthy and involves depositions (sworn testimony) and interrogatories (written questions).
- Negotiations and settlement: Even after a lawsuit is filed, there's often an opportunity for settlement negotiations. Insurance companies may reconsider their position and offer a more favorable settlement to avoid the cost and risk of a trial.
- Trial: If a settlement can't be reached, the case will proceed to trial. A judge or jury will hear evidence and determine the outcome. This can be a time-consuming and expensive process.
What are the potential outcomes of suing your own insurance company?
The outcome of a lawsuit is uncertain, depending on the specifics of the case and the evidence presented. Possible outcomes include:
- Favorable judgment: The court rules in your favor, ordering the insurance company to pay you the damages you're entitled to, plus potentially legal fees and punitive damages (in cases of bad faith).
- Unfavorable judgment: The court rules against you, leaving you responsible for court costs and attorney fees.
- Settlement: You and the insurance company reach a settlement agreement outside of court, avoiding a trial. This is the most common outcome.
How do I find a lawyer to represent me against my insurance company?
Finding an attorney specializing in insurance disputes is crucial. You can:
- Seek referrals: Ask friends, family, or other professionals for recommendations.
- Contact your state bar association: They can provide referrals to lawyers in your area.
- Search online: Use online legal directories to find lawyers specializing in insurance litigation.
What are the costs involved in suing your insurance company?
Legal fees can be substantial, especially if the case goes to trial. Many lawyers work on a contingency fee basis, meaning they only get paid if you win the case. However, you'll still likely have to cover other costs, such as filing fees and expert witness fees.
Suing your insurance company is a complex legal process with significant potential consequences. It is highly recommended to seek legal counsel before pursuing such action. This information is for general knowledge and does not constitute legal advice. Always consult with a qualified attorney for guidance on your specific situation.
