A Guide to Suing Your Car Insurance Company

Car insurance provides essential financial protection after an auto accident. But sometimes issues arise where insurance companies deny valid claims or don’t offer fair settlements. In these cases, taking legal action by suing your insurance provider may be necessary to get the compensation you deserve. This guide covers when and how to sue a car insurance company.

When Can You Sue a Car Insurance Company?

There are several situations where suing your auto insurer may be justified:

  • Claim wrongfully denied – You have compelling evidence your claim is legitimate yet the insurer denies providing coverage.

  • Lowball settlement – The insurer offers a settlement amount far below your actual losses and refuses to negotiate fairly.

  • Delayed claim – The insurer stalls and drags out processing your claim beyond a reasonable timeframe.

  • Misrepresentation – The insurer misrepresents policy details or lies about claim investigation findings.

  • Bad faith – The insurer seems to act maliciously by denying reasonable requests for information or otherwise stonewalling you.

If less aggressive measures like escalating to a supervisor or insurance regulator don’t resolve denied or underpaid claims, then a lawsuit may be your recourse.

Types of Lawsuits Against Insurance Companies

Two major types of lawsuits can be filed against auto insurers:

Breach of contract – You sue for breach of the insurance policy contract. This argues the insurer failed to fulfill promised coverage owed.

Bad faith – You allege the insurer acted negligently or in bad faith in handling your claim. All states allow bad faith lawsuits except Arkansas and Louisiana.

An experienced attorney can advise if your situation merits a lawsuit and the optimal legal strategy to recover damages. Lawsuits should always be a last resort after exhausting other options.

Evidence Needed to Sue an Insurance Company

Building a convincing case starts with gathering documents and evidence to prove why the insurer acted improperly. Your attorney will compile relevant evidence like:

  • Claims correspondence – Letters, emails, notes showing the insurer denied or delayed your claim.

  • Police report – The accident report proving the accident circumstances and establishing fault.

  • Medical records – Documents validating your injuries were caused by the accident.

  • Damage documentation – Repair estimates, invoices proving costs to fix your vehicle or other property damage.

  • Expert testimony – Statements from experts like accident reconstructionists regarding who was at fault.

  • Policy documents – Your policy and insurer’s own claims manuals verifying the coverage you should receive.

Thoroughly documenting losses and communicating repeatedly with the insurer establishes a paper trail. It builds your case should legal action become necessary.

Steps to Suing an Insurance Company

If negotiating with the insurer reaches an impasse, suing becomes the remaining option. The process typically involves:

1. Consult an attorney – Have an attorney experienced in insurer lawsuits review your situation for free. They can assess if you have reasonable grounds for a case.

2. Try to settle – Your attorney makes a final formal demand for the insurer to settle the claim fairly. This gives written notice before potential legal action.

3. File a lawsuit – If the insurer rejects the demand, your attorney files a civil complaint in court alleging counts like breach of contract or bad faith dealings.

4. Engage in discovery – During discovery, your attorney and the insurer’s legal team exchange relevant evidence and documents, conduct depositions, and more.

5. Attempt mediation – Mediation with a neutral third-party mediator is often pursued to explore settling without a protracted court battle.

6. Go to trial – If no settlement is reached your attorney presents arguments and evidence before a jury who decides if the insurer erred.

While a trial is rare, your attorney needs to be ready and willing to go to court if the insurer refuses to negotiate fairly. Taking the right steps bolsters your leverage.

Key Factors in Insurance Claim Lawsuits

Certain factors can impact the legality and strength of an insurance lawsuit. Understanding these nuances helps in making a compelling case:

  • State law – Most states permit bad faith lawsuits but requirements vary. Louisiana and Arkansas prohibit them. Consult an attorney licensed locally.

  • Negligence and liability – The other driver’s negligence and liability for the accident must be provable for the insurer to be obligated to cover your losses.

  • Policy language – What exactly does your policy cover and exclude? Language is analyzed to confirm the insurer is breaching the contract.

  • Accident details – Police, expert reports must show the accident circumstances align with injuries claimed. Disputes over accident facts weaken a case.

  • Documentation – Thorough paperwork showing losses helps prove the insurer violated duties by underpaying you.

  • Insurer actions – Evidence must demonstrate the insurer acted in bad faith or failed to honor the policy. Ruling out legitimate grounds for denial is key.

  • Exhausting appeals – Courts want to see you fully exhausted the insurer’s internal appeals process before suing.

Understanding these dynamics helps build a lawsuit likely to prevail or force a fair settlement. An attorney experienced with insurer lawsuits can best advise you.

Common Defenses insurers Use Against Claims

Insurers have resources to vigorously contest lawsuits, raising common defenses like:

  • You breached the policy terms in some way.

  • Questions exist over who was actually at fault.

  • Your claimed injuries and losses are inflated or suspect.

  • The accident circumstances are unclear or disputed.

  • New evidence reveals you made material misrepresentations.

  • You failed to exhaust the insurer’s internal appeals process.

A seasoned attorney anticipates these defenses and proactively addresses them through meticulous evidence gathering and legal arguments. Outsmarting deep-pocketed insurers requires experience and tenacity. Never rely on do-it-yourself methods.

Average Settlements and Awards in Insurance Lawsuits

It is difficult to assign a dollar figure to the average settlement or court award resulting from successfully suing an insurer. Each case depends on its unique nature and losses involved. However, some general guidelines on potential recovery amounts in disputed insurance claims:

  • Injuries and vehicle damage under $15,000 – Potential awards up to $30,000

  • Losses between $15,000 – $50,000 – Settlements from $30,000 to $75,000

  • Major injuries or loss exceeding $100,000 – Judgements over $100,000

  • Severe bad faith or punitive damages sought – Settlements up to policy limits

An attorney determines the full value of your case and aggressively negotiates based on those specifics. No formulas exist, but suitable compensation must cover all categories of loss.

Is Suing Your Insurer Worth It?

Lawsuits should never be entered lightly, so first consider:

The risks – No outcome is guaranteed and you may expend significant time and legal costs. Weigh if the potential reward is worth the hassle and risk.

Your tolerance – Lawsuits require time and emotional energy. Are you prepared for a lengthy legal road with no payout guaranteed?

Your needs – Does the settlement amount in dispute significantly impact your financial situation and ability to move on after the accident?

Your case details – Do all the unique facts seem to clearly indicate the insurer’s culpability? A murky situation lessens your odds.

Your lawyer’s advice – Most importantly, get an honest assessment from an attorney experienced in these cases on your odds of prevailing or forcing a favorable settlement.

Speak to a qualified attorney before making decisions to gain expert perspective on whether your situation merits the cost and hassle of suing an insurance provider. They can lay out your prospects for success.

Why an Attorney Is Vital in Insurance Lawsuits

Pursuing a disputed insurance claim alone is extremely difficult, which is why enlisting the help of a lawyer is strongly advised:

  • Insurers regularly handle claims, so have vast experience to their advantage. They also employ their own attorneys well-versed in defending suits.

  • The legal process is filled with complex filings, deadlines, and procedures. Navigating it smoothly requires legal knowledge.

  • Your evidence and arguments must outplay what will be a vigorous defense from the well-funded insurer.

  • Adjusters use clever tactics you may fall for without an attorney’s guidance. Don’t be misled.

  • Objective expert perspective is invaluable; a lawyer detaches emotion to provide seasoned case insights.

  • Attorneys have access to resources like accident reconstructionists, private investigators, economic analysts and medical experts.

  • An attorney may uncover additional liable parties, cost recovery sources, and legal avenues you’re unaware exist. Don’t leave money on the table.

  • Skilled negotiators can interact with insurers on your behalf; lawsuits induce pressure that improves settlement offers.

Trust your insurance dispute solely to a qualified legal professional. Many offer free consultations to discuss your situation.

Questions to Ask Before Suing Your Insurer

Prudent individuals ask pertinent questions before diving into litigation. Some of the most crucial ones include:

  • Do I have a written denial of my claim I can

Law Lessons : How to Sue a Car Insurance Company


What is it called when an insurance company refuses to pay a claim?

Bad faith insurance refers to an insurer’s attempt to renege on its obligations to its clients, either through refusal to pay a policyholder’s legitimate claim or investigate and process a policyholder’s claim within a reasonable period.

When may an insured bring suit against his carrier for failure to pay a claim?

If they refused to pay a legitimate claim or paid less than the full value of the claim, they more than likely acted in bad faith and you can proceed to suing an insurance company for denying a claim, acting in bad faith, and breaching your contract.

Can someone sue you after insurance pays Florida?

In most cases, a person cannot sue you after your insurance pays the plaintiff. If the at-fault driver’s insurance company settles with the injured person, the settlement documents will include a release of all claims.

What is the meaning of the word subrogation?

Subrogation is a term describing a right held by most insurance carriers to legally pursue a third party that caused an insurance loss to the insured. This is done in order to recover the amount of the claim paid by the insurance carrier to the insured for the loss.

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