Suing Auto Insurance: Refusal To Cover Damages

If your insurance company fails to meet its legal obligations under the terms of your insurance policy, you can file a bad faith lawsuit against them. Common violations include:

- Wrongful claim denial

- Untimely and incomplete claim process

- Untimely payment to the claimant

- Inadequate payments as it relates to insurance coverage and policy limits

- Failure to pay valid claims

You should contact a qualified attorney if you think your insurance company is being unfair. It's also wise to consider contacting an insurance claim attorney even before receiving a claim denial.

File an appeal with your insurer

If your auto insurance company refuses to cover damages, you can file an appeal. The appeals process typically involves gathering evidence, writing an appeal letter, and sometimes, hiring an attorney. Here are the steps to file an appeal with your insurer:

Step 1: Review your claim denial letter

The first step is to carefully review the denial letter from your insurance company. The letter should outline the reasons for the denial and may provide information on how to appeal the decision. Understanding the insurance company's stance on your claim is crucial before proceeding with the appeal.

Step 2: Research your auto insurance claims rights

It is important to know your rights as a policyholder when it comes to claims and appeals. Understanding your rights will empower you to navigate the appeals process more effectively.

Step 3: Write a claims appeal letter

In your appeal letter, explain why you believe your claim should have been accepted and provide any relevant evidence to support your case. This may include photographs, eyewitness reports, medical records, police reports, and other documentation. Be sure to provide clear and concise reasoning and connect each piece of evidence to your argument.

Step 4: Gather evidence

To strengthen your appeal, gather as much evidence as possible. This may include physical and digital copies of documents related to your claim, photos of property damage and injuries, invoices from medical providers and auto repair shops, and any other information that supports your case. Having comprehensive documentation can make a significant difference in the outcome of your appeal.

Step 5: Understand common denial reasons

Understanding the common reasons for claim denials can help you build a stronger appeal. Some of the most common denial reasons include:

• The claim exceeds the policy limits.
• You weren't named on the insurance policy.
• You missed a payment or filing deadline.
• You were at fault in the accident.

Make sure none of these reasons apply to your situation before filing an appeal.

Step 6: Consult an attorney

If you feel overwhelmed by the appeals process or are unsure how to proceed, consider consulting an experienced auto accident attorney. An attorney can review your claim denial letter and policy, gather the necessary evidence, and guide you through the entire process.

Gather evidence to support your claim

Gathering evidence is a crucial step in suing an insurance company for denying your claim. Here are some detailed instructions to help you with this process:

• Keep a copy of your insurance policy: Understand the terms and conditions of your policy that apply to your claim. Highlight relevant sections and make notes to support your case.
• Collect evidence of your damages: This includes both tangible and intangible losses. For example, if you were in a car accident, you should take photographs of your damaged vehicle from different angles, gather estimates for repair costs, obtain towing costs, and get a valuation report if your car was totaled. If you suffered injuries, collect and organize all your medical records, bills, and other related documents. These will serve as crucial evidence of the extent and severity of your injuries, connecting them to the accident, and showing your prognosis and future care needs.
• Document financial losses: Besides medical expenses, you may have other financial losses such as lost wages due to time off work for recovery. To claim these losses, gather evidence such as pay stubs, tax returns, or a doctor's note verifying the time needed for recovery.
• Obtain witness statements: If there were any witnesses to the incident, get their contact information and, if possible, written or recorded statements about what they saw. These statements can provide valuable support for your claim.
• Gather police reports: If the police were involved and a report was filed, obtain a copy of the report. This can help establish the facts of the incident and determine liability.
• Retain relevant correspondence: Keep a record of all communication with the insurance company and its representatives. This includes emails, letters, and notes from phone conversations, including dates, names of representatives, and a summary of what was discussed. Stay calm and professional in your interactions, assuming that your calls may be recorded.

Consult a lawyer

If your auto insurance company refuses to cover damages, you may be able to sue them for acting in bad faith. However, before you decide to sue, it is important to consult a lawyer.

A lawyer can help you understand your rights and options and guide you through the process of suing your insurance company. They will also be able to advise you on the best course of action based on the specific details of your case.

When choosing a lawyer, it is important to select one with extensive experience in insurance litigation. Insurance law can be complex, time-consuming, and expensive, so you will want a lawyer who is knowledgeable and experienced in this area.

It is also a good idea to gather relevant documentation before meeting with a lawyer. This includes your insurance policy, correspondence with the insurance company, medical records, and any other evidence related to your claim. This documentation will help your lawyer understand your case and determine the best course of action.

In some cases, the presence of a lawyer may be enough to persuade the insurance company to honour its obligations and provide a fair settlement. However, if the insurance company still refuses to cooperate, a lawyer can help you build a strong case and represent you in court if necessary.

Go to claims mediation

If you're suing your auto insurance company for refusing to cover damages, you might be able to resolve the issue through claims mediation. Claims mediation is a form of alternative dispute resolution that can be used to facilitate the settlement of most kinds of legal disputes, either without going to court at all, or while the lawsuit process is playing out in court.

Mediation is when a neutral third party (the mediator) helps both sides work out an agreement. The mediator is a trained dispute resolution specialist who works with both sides to resolve key issues like who was at fault for the car accident, and the scope of the resulting injuries, vehicle damage, and other accident-related losses.

Mediation is usually quicker and cheaper than going to court, and it can be done at any time—before, during, or after filing a lawsuit. In some cases, courts will strongly encourage mediation of car accident cases after a lawsuit has been filed, but they don't usually order the parties to participate.

During mediation, both sides will have the opportunity to explain their view of the case, including issues like who was liable for causing the crash, and the nature and extent of the resulting losses. The mediator will then work with each party separately, acting as a "shuttle diplomat" to help each side see the other's view of the case and try to reach a settlement.

It's important to note that mediators don't issue rulings or make decisions; they simply facilitate the process and try to bring the two sides together. If the mediation is successful, the parties will reach a mutually satisfactory solution and agree on a settlement. If not, the case may proceed to court.

To initiate claims mediation, you can contact a professional mediation service or an independent mediator, who will usually be a lawyer or retired judge with experience in personal injury and insurance cases. These services typically charge substantial fees, but in some cases, you may be able to access free or low-cost community mediation programs.

File a lawsuit

Filing a lawsuit against your auto insurance company is a complex process that requires a lot of time and effort. Before you take legal action, you should seek guidance from a car accident lawyer who can investigate the accident by reviewing necessary documentation, such as police reports, and build a strong case against the insurance company on your behalf.

• Prepare documentation: To get the process started, collect all relevant documents and communications with your insurance company. This includes the denial letter, a copy of your car insurance policy, any repair or medical bills and all other documentation you have.
• File an appeal with your insurer: Before pursuing legal action, it’s worth filing an appeal with your car insurance company first. You’ll submit a letter of appeal to your insurer explaining why your claim should be covered, along with the evidence and documentation you’ve gathered.
• Reach out to an attorney: If you’ve explored all your options and have decided to sue your insurance company, you’ll want to reach out to a lawyer who specializes in car insurance law. A lawyer can provide insight into whether you have a valid case, how much compensation you may be able to receive and whether it’s worth the time and investment of pursuing legal action.

Lawsuits can be drawn-out processes that may require a great deal of time, effort and money, so make sure you do thorough research to ensure it’s worth it before committing to taking legal action against your insurer. If you have a solid case and find a reliable attorney, it may help provide the financial compensation and peace of mind you’re seeking.

Frequently asked questions