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INSURANCE LAW
Insurance attorneys focus on the legal aspects of the insurance industry. Despite state regulation by the Department of Insurance, companies frequently attempt to bypass regulations, reject legitimate claims, and manipulate claim records to feign compliance with the law.
Primarily, these lawyers advocate for individuals whose insurance claims were denied, who experienced bad faith actions from companies, or who are victims of insurance fraud.
WHAT TO DO WHEN MY INSURANCE CLAIM IS DENIED?
An insurance company might reject a claim for various reasons, including:
- Errors in patient or claimant details
- Policy termination
- Non-covered services
- Failure to update insurance with additional information
- Missing filing deadlines
- Policy exclusions
- Pre-existing conditions
- Fraudulent claims or misrepresentation
While insurance companies are legally obligated to handle claims in good faith, it's common for them to act unfairly by denying claims. This constitutes bad faith and can lead to a civil lawsuit against the insurer. Instances of bad faith include delays in processing claims, inadequate investigations, refusal to defend lawsuits, failure to offer reasonable settlements, and misinterpreting policy terms.
WHAT EXACTLY IS BAD FAITH? HOW DO I KNOW IF MY INSURER ACTED UNFAIRLY?
One prevalent legal issue involves an insurer wrongfully denying a claim made by an insured individual. However, there are circumstances where claim denials are justified under the policy terms.
For instance, in auto insurance cases, claims may be denied if the insured is found responsible or grossly negligent in an accident. Similarly, in home insurance, claims might be rejected if the homeowner's actions led to the property damage, such as arson or intentional flooding.
Insured individuals have several legal avenues to pursue against their insurers, including claims for:
- Failure to timely pay claims: Insurers are expected to act promptly and fairly. If they unreasonably delay or offer inadequate settlements, the insured may file a bad faith claim.
- Failure to provide representation: Insurers must defend their clients in lawsuits per policy terms. Refusal to do so or accepting insufficient settlements can warrant a bad faith claim.
- Breach of contract: This is the most common legal basis for suing insurers, where the insured alleges the company violated policy terms.
IS IT POSSIBLE TO TAKE LEGAL ACTION AGAINST MY INSURANCE PROVIDER?
There are numerous circumstances that may lead an individual to consider suing their insurance company, a scenario that occurs quite frequently. To comprehend the viability of such a lawsuit, it's essential to grasp the legal dynamics between the insured party—the individual purchasing insurance—and their insurer.
At its core, insurance operates as a contractual agreement known as the insurance policy. In this arrangement, one party agrees to remit a premium, while the other party, the insurer, pledges to provide coverage for the insured.
Should a covered event result in loss, damage, or liability, the insurance company is obligated to shield the insured from these consequences. Consequently, a legal contract binds the insured, who pays for coverage, and the insurer, which undertakes to safeguard the insured against specified events. Lawsuits often arise when insurers fail to fulfill their obligation to indemnify the insured in the event of a covered incident or when they breach their contractual duties, such as wrongfully denying insurance claims.
WHAT LEGAL SOLUTIONS EXIST IN AN INSURANCE CLAIM LAWSUIT?
In the event that an individual opts to initiate a civil lawsuit against their insurer and achieves a favorable outcome, the court may grant compensatory damages. As previously mentioned, the predominant legal basis for suing insurance companies revolves around breach of contract.
Upon prevailing in a breach of contract case, the plaintiff is entitled to actual damages, corresponding to what was stipulated in their contract. In certain jurisdictions, plaintiffs may also recover out-of-pocket expenses, including legal fees.
In specific circumstances, punitive damages might be awarded. For instance, if the insurer unjustly denies a claim and delays payment, the insured party could potentially recoup:
- The value of the property claim
- Legal fees incurred in pursuing the claim
- Potential punitive damages
WHEN TO HIRE AN ATTORNEY FOR INSURANCE CLAIMS?
State laws regarding insurance matters and bad faith claims vary. If faced with a claim denial or suspecting bad faith conduct by the insurer, seeking guidance from a seasoned insurance attorney promptly is advisable.
