Getting hit by an uninsured or underinsured driver can leave you facing massive auto repair bills and medical expenses. Luckily, most car insurance policies include uninsured and underinsured motorist coverage to protect you in these situations. However, conflicts can arise if your insurance company denies or underpays your claim. So can you take legal action against your insurer for an uninsured motorist accident?
The short answer is yes – you may be able to file a lawsuit against your insurance company if they improperly handle an uninsured or underinsured motorist claim. But winning these cases can be challenging. Here is what you need to know about suing your auto insurer after a collision with an uninsured driver.
When You Can Sue Your Insurance Company After a Collision with an Uninsured Driver
Here are some examples of situations that may give grounds to sue your insurer over an uninsured motorist claim:
Wrongful denial of your UM/UIM claim – If your insurer denies your uninsured motorist claim without proper justification, you may have a valid basis for a lawsuit to get the claim paid.
Lowballing your claim – Even if your insurer approves the claim, they may severely underpay the amount you are owed. You can sue for the difference between what they paid out and the full value of your damages.
Failure to investigate – If the adjuster does not properly investigate your claim before denying it, you may be able to bring suit for bad faith claims handling.
Violation of state insurance regulations – If your insurer violated any state laws or regulations in the handling of your UM/UIM claim, those statutory violations can support a lawsuit.
However, suing an insurance company is complex, so consult an attorney experienced in policyholder disputes to assess if you have valid grounds for a case.
Elements Needed to Sue Your Insurer for an Uninsured Motorist Claim
To build a successful lawsuit against your auto insurer for denial or underpayment of an uninsured motorist claim, you would need to prove these key elements:
- You have uninsured or underinsured motorist coverage
- The other driver was uninsured/underinsured or lacked adequate liability limits
- The accident was legally the other driver’s fault
- You suffered physical injuries and/or vehicle damage in the crash
- You properly filed a claim per your policy terms
- The insurer improperly delayed, underpaid, or denied your claim
Without documentation supporting each of these factors, you will likely struggle to win any legal action against your insurance company.
Common Defenses from Insurers in UM/UIM Lawsuits
Auto insurance companies have legal teams ready to fight uninsured motorist lawsuits. They will put forth defenses like:
No UM/UIM coverage – Insurers may claim you did not purchase or maintain the required uninsured motorist coverage at the time of the accident.
Question of fault – The insurer argues there is insufficient evidence that the other driver was fully at-fault, or that you may have been partially negligent.
No damages proven – The insurer can claim you failed to adequately document your injuries or property damages from the collision.
Violation of policy terms – Insurers will scour for any technicality like late notice of the accident that could allow denial of the claim.
Claim already paid – If you accept any prior claim payment, the insurer will assert that compensates you fully for your damages.
Overcoming these defenses requires solid legal arguments and evidence from documents, witnesses, and crash experts.
Key Steps to Take if Suing Your Insurance Company After a Crash with an Uninsured Driver
If considering legal action against your insurer for denial of an uninsured motorist claim, experts recommend taking these steps:
Review your policy – Understand exactly what UM/UIM coverages you have. Look for any provisions on lawsuits against the insurer.
Gather evidence – Compile police reports, medical records, repair estimates, and photographic evidence to prove your damages.
Consult an attorney – Have an experienced lawyer review your claim file and evaluate if you have viable grounds to sue the insurance company.
Send demand letter – Have your attorney send a demand letter detailing your damages and stating you will pursue litigation if the claim is not properly paid.
File complaint – If your demand is rejected, your lawyer can file a civil complaint against the insurer alleging bad faith or breach of contract.
With the right evidence and legal arguments, you may be able to successfully hold your insurance company accountable for failing to pay an uninsured motorist claim.
Alternatives to Suing Your Insurance Company
Before jumping straight to a lawsuit, experts recommend first trying these alternate resolution options:
File a complaint – Submit a formal complaint to your state insurance regulator documenting how the insurer mishandled your claim.
Request arbitration – Many policies mandate arbitration to settle disputes over claims. Arbitration can be faster and less expensive than going to court.
Request appraisal – For disputes over the dollar value of damages, appraisal can provide an independent assessment from an expert.
Negotiate compromise – Your attorney can negotiate a settlement between the insurer’s offer and the full value of your damages.
Switch insurers – If you have ongoing issues with claim denials, change to a new insurance company with better customer service ratings.
Uninsured Motorist Claims Best Practices
Follow these steps when filing an uninsured motorist claim to avoid issues that could lead to legal disputes:
Notify your insurer promptly of any accident with an uninsured driver.
Cooperate fully with the claims investigation and provide all required documentation.
Consult an attorney early in the claims process if you anticipate any disputes over fault or damages.
Thoroughly document your collision injuries and property damage from the outset.
Be aware of all required timeframes and deadlines in your policy.
While legal action against insurers can help recover wrongfully denied payments, it is best to avoid these scenarios by understanding your coverage and diligently pursuing your uninsured motorist claim.
Common Questions About Suing Auto Insurers for Uninsured Motorist Claims
Here are answers to some frequently asked questions about lawsuits against auto insurers:
Can you sue for emotional distress from a claim denial?
Typically, you can only sue an insurer for quantifiable financial damages like medical bills or vehicle repairs. Emotional distress is difficult to prove as a damage directly resulting from a claim denial.
What damages can you recover by suing?
If successful in a lawsuit, you can potentially recover your full policy limits for uninsured motorist coverage, as well as any other monetary damages directly resulting from the claim denial.
How much does it cost to sue an insurance company?
The average cost to sue an insurance company is around $45,000 including attorney fees. But costs vary based on the complexity of your case and your state’s legal expenses.
How long do you have to sue an insurer?
This depends on your state’s statute of limitations – typically 3 to 6 years. Your policy may also include a contractual limitation requiring you to file suit against the insurer within 1 to 2 years of the accident.
Can insurance companies sue their customers?
Yes, insurers can file lawsuits against policyholders for fraud, non-payment of premiums, or to seek reimbursement for claims paid if it is later determined the policyholder was at fault.
Thoroughly documenting your damages and understanding your state’s insurance regulations and policy terms are vital to successfully pursuing litigation against an insurer over an uninsured motorist claim denial. Consulting with an attorney experienced in insurance bad faith cases is highly recommended before taking legal action.
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