Suing an Insurance Company After a Car Accident: A Comprehensive Guide

Getting into a car accident can be a stressful and challenging experience. Even if you weren’t at fault, dealing with insurance claims, car repairs, medical bills, and lost income can quickly become overwhelming.

Unfortunately, insurance companies don’t always make the process easier. Despite paying premiums, some accident victims find their claims denied or offers reduced to save the insurer money.

If you believe your insurance company acted in bad faith or failed to provide the compensation you deserve, you may be wondering if you can take legal action. This guide covers everything you need to know about suing an insurance provider after a car accident.

When Is It Appropriate to Sue an Insurance Company?

In most cases, it’s best to try settling your claim directly with the insurance company before resorting to a lawsuit. However, there are certain circumstances where taking legal action is justified:

• Your claim gets denied despite providing all required information
• The insurer unreasonably delays processing your claim
• You receive a lowball offer that doesn’t adequately cover your losses
• The insurance company engages in deceptive tactics to avoid paying out

Essentially, if the insurance provider fails to honor your policy by not compensating you fairly, they may be acting in bad faith. This type of wrongful behavior could make them liable for additional damages above your policy limits.

Understanding Bad Faith Insurance Tactics

Bad faith refers to unfair claims practices by an insurance company that breaches its duty to the policyholder. An insurer may be acting in bad faith if they:

• Deny your claim for invalid reasons
• Delay processing your claim unreasonably
• Don’t conduct a thorough investigation
• Misrepresent facts or policy provisions
• Make unrealistic demands for supporting documents
• Refuse to pay a valid claim
• Lowball settlement offers

These tactics allow insurers to take advantage of vulnerable claimants. By forcing you to accept an unreasonably low offer, they save money at your expense.

Steps for Suing an Insurance Provider After an Accident

If negotiating directly with the insurer fails, suing for bad faith may help you recover adequate compensation. However, the process involves many steps:

1. Consult an Attorney

An experienced bad faith insurance attorney can assess whether you have sufficient grounds for a lawsuit. They’ll also handle communication and filings so you can focus on recovery.

2. Send Demand Letter

Before filing suit, your lawyer will likely send a demand letter detailing your losses and the compensation you’re seeking. This gives the insurer one last chance to settle.

3. File Complaint

If the demand letter proves unsuccessful, your attorney can file a civil complaint in your local court system. This formally initiates the bad faith lawsuit against the insurer.

4. Discovery Phase

During discovery, both sides exchange relevant information and evidence about the case. Your lawyer will gather documents to prove bad faith, such as claim correspondence and recorded calls.

5. Attempt Settlement

Even after filing, most cases settle out of court. Your attorney will negotiate aggressively to reach a fair settlement before trial.

6. Go to Trial

If no settlement is reached, your case proceeds to a trial where your lawyer presents arguments and evidence before a judge or jury.

Key Factors in Insurance Bad Faith Claims

Several important elements can impact whether you have a viable bad faith claim and the potential value of your case:

• Breach of contract: Your insurer failed to honor the terms of your policy by denying reasonable benefits.

• Duty of good faith: Insurance companies have a duty to handle claims fairly and avoid unreasonable delays or denials.

• Damages: You need to prove financial harm resulting from the insurer’s actions, such as unpaid medical bills or lost wages.

• Evidence: Documentation like call recordings, correspondence, and claim files help substantiate bad faith.

• Policy limits: Even if successful, compensation is limited to your policy amount unless you claim damages above that.

• State laws: Bad faith laws vary significantly by state, which affects the burden of proof and compensation available.

Gathering Evidence to Support Your Claim

Successfully proving insurer bad faith hinges on having sufficient supporting evidence. Your attorney will gather pertinent documents and communications, such as:

• Recorded phone calls
• Written correspondence (letters, emails)
• Adjusters’ claim notes and reports
• Medical records and bills
• Police reports
• Witness statements
• Claim processing documents
• Training materials

Thoroughly documenting how the insurer mishandled your claim is crucial to recovering maximum compensation.

Common Defenses Insurance Companies Use

Insurers have various defenses against bad faith claims at their disposal. Understanding these can help you build a stronger case:

• Lack of coverage: They may claim your damages fall outside of your policy coverage.

• Dispute over value: The insurer argues your claimed losses exceed the actual value.

• Pre-existing conditions: They allege some damages stem from prior injuries or conditions.

• Questionable liability: The insurer disputes who was actually liable for the accident.

• Uncooperative policyholder: They accuse you of failing to provide required information.

• Workload: Heavy workloads and insufficient staffing led to claim delays.

• Miscommunication: Your claim was denied or delayed by mistake, not bad intent.

A skilled bad faith attorney can counter these defenses through careful preparation and argument.

Common Compensation and Damages

If your bad faith claim succeeds, there are different types of damages you may recover:

• Actual damages: Compensates your tangible monetary losses, like medical bills and lost wages.

• Non-economic damages: Covers intangible losses like pain and suffering.

• Punitive damages: Extra sums awarded to punish especially egregious insurer actions.

• Attorney fees: Insurers may be ordered to pay your legal costs.

Actual damages are capped at your policy limits in some states. However, others allow extracontractual or punitive damages above those limits in bad faith cases.

Average Settlement Payouts

It’s difficult to estimate average settlement amounts for bad faith claims since each case has unique circumstances. Payouts often range from $20,000 to $100,000 depending on applicable policy limits, state laws, and proven damages.

Cases involving severe injuries, disability, or death tend to result in higher settlements. If negotiations fail, a trial verdict could produce a much larger judgment.

Statute of Limitations for Filing a Claim

Each state sets legal time limits on when policyholders can sue for bad faith insurance practices. These statutes of limitations typically range from 1-6 years from the date of loss.

It’s critical to file your bad faith claim before exceeding your state’s established time limit. Otherwise, you forfeit your right to take legal action against the insurer.

Finding the Right Bad Faith Insurance Lawyer

Pursuing a bad faith claim against an insurance company is complex and risky without sound legal counsel. An experienced attorney levels the playing field against these massive corporations.

When choosing a bad faith lawyer, look for:

• Extensive bad faith litigation experience
• Specialization in insurance law
• Substantial case results and settlements
• Strong negotiator
• In-depth knowledge of state laws and claims regulations
• Good client communication skills
• Resources to handle expensive litigation

A qualified attorney understands the intricacies of insurance policies and claims adjustment. They can effectively prove your insurer acted unreasonably based on established laws and standards.

Alternatives to Bad Faith Lawsuits

Filing a lawsuit should be a last resort option after exhausting all other remedies:

• Appeal claim denial: Provide any additional information the insurer requests to have your claim reconsidered.

• File complaint with insurance regulator: State insurance commissioners investigate complaints against insurers.

• Try mediation: A neutral third-party mediator may help resolve your claim dispute.

• Consult bad faith attorney: They can negotiate a settlement and provide a professional assessment of your case.

• Request arbitration: Arbitration presents a faster and cheaper way to settle outside court.

Key Takeaways

• You can sue an insurance provider for bad faith claim handling, such as unreasonable delays or wrongful denials.

• Strong evidence of the insurer’s misconduct and resulting financial damages are necessary elements for a successful bad faith case.

• An experienced attorney can help you navigate the complex legal process, deal with the insurer’s lawyers, and fight for maximum compensation.

• It’s wise to consult a bad faith lawyer to evaluate your case before committing to expensive litigation.

• Being forced to take legal action is frustrating, but sometimes unavoidable to obtain fair claim compensation after a serious accident.

Suing an insurance company should never be taken lightly given the time, costs, and uncertainty involved. But in cases of clear bad faith claim practices, legal action may offer the best or only path to justice. With an attorney’s help, you can hold negligent insurers accountable.