Can You Sue Your Own Insurance Provider?
The idea of suing the insurance company that provides your policy can seem pretty crazy. After all, isn't the policy supposed to make your life easier by avoiding things like insurance litigation?
While having a policy is generally a great idea, there are times when you may need to hire an insurance litigation attorney. Individuals and businesses dealing with the following four situations may need to litigate against their insurance carriers.
Failure to Defend
This scenario occurs when an insurance company declines to defend a policyholder against a third party's claim. Usually, a case of failure to defend arises when the carrier refuses to pay a claim that the policyholder believes it should have covered. A failure to defend often leaves the policyholder on the hook for the entirety of any possible court judgment against them.
Broadly speaking, an insurance company has a duty to pay all valid claims within the terms of a holder's policy. An insurer may have interpreted the policy differently than the holder, leading to a difference in expectations. If the policyholder wishes to compel the insurance provider to pay the claim, they will likely have to sue.
An insurance litigation attorney may also bring a case based on a company's failure to investigate a claim in a timely manner. Suppose a homeowner had storm coverage. The day came when a tree branch went through the roof of the house. Not only does the homeowner have a legal right to expect compensation for the claim, but they also have the right to see the insurer investigate and make a decision on the claim promptly. If you've been waiting for months or even years, insurance litigation may be the only way to get the policy provider's attention.
Insufficient Explanation for a Denial
Whenever an insurance company denies a claim, it needs to be as specific as possible in describing its reasoning. This should include a review of the applicable terms in the policy and why the company doesn't believe they apply in your specific case. Failing to explain a denial fully enough is grounds for insurance litigation, especially if the failure limits your ability to appeal the rejection.
Bad Faith Denial
Insurers rarely avoid paying claims just to stay off the hook, but it's still a possibility. If the denial makes no sense given the facts, discuss it with an insurance litigation attorney. They can tell you whether they feel you might have a cause for action against your insurance provider.
Contact a local insurance litigation attorney to learn more.