Can You Sue An Insurance Company For Denying A Claim?

August 3 2024
| Insurance

As a policyholder who pays premiums religiously, you expect to be compensated when you make a valid claim. However, in many cases, this doesn’t happen. Insurance companies are notorious for denying claims, and although sometimes they deny claims for valid reasons, often they do not. When an insurance company denies your claim for reasons that are not valid, it means the insurance provider is acting in bad faith.

An insurance company acts in bad faith when it fails to fulfill its contractual obligations to you, the policyholder. Bad faith actions are not limited to your own insurance company. In some situations, another party’s insurance provider can also act in bad faith.

If an insurer denies your claim without a valid reason, unnecessarily drags out the claim process, or offers a compensation amount far below what is fair and reasonable, they are acting in bad faith. This failure to adequately address your legitimate claim can worsen your financial and emotional burdens, leaving you without the support you are entitled to receive.

Whether it is your insurer or that of another party, the primary issue is the same: the insurer may not act in bad faith. When an insurance provider does this, you might wonder if you can sue them. Read on to understand your rights and insurance companies’ obligations to ensure you receive the coverage and compensation you deserve. If you or a loved one has been denied a valid claim for compensation, our bad-faith insurance lawyer can help you.

Why hire our bad-faith insurance attorney to help you?

At Leverty & Associates Law, our insurance lawyers possess in-depth knowledge of insurance policies, industry practices, and legal strategies necessary to advocate for you. We will help you understand your rights under your insurance policy and assess whether your claim was wrongfully denied or undervalued.

Our attorneys are skilled negotiators and litigators who work tirelessly to maximize your compensation and hold insurance companies accountable for their actions. When you hire us, we will prioritize your case and represent you aggressively. Contact us today at (775) 322-6636 (Reno) and (702) 507-0201 (Las Vegas) to know more about our services.

We have a proven track record of successfully handling complex insurance disputes.

Common reasons for claim denials

Insurance companies deny claims for various reasons. Sometimes, the denial is valid due to policy exclusions, lapses in coverage, or insufficient documentation. However, there are instances where the denial is unjust or is made in bad faith. Understanding the distinction is crucial before pursuing legal action.

The following are common reasons why insurance providers deny claims:

Policy exclusions: Your claim can be denied if the event that occurred or the damages you incurred are not covered under your policy.
Lapsed coverage: If your policy was not active at the time of the incident, your claim is likely to be denied.
Insufficient documentation: Lack of necessary proof or incomplete paperwork can result in denial.
Disputed liability: The insurer might argue that the policyholder is at fault or that the incident is not covered.

Grounds for suing an insurance company

You may have grounds for a lawsuit if you believe your claim was wrongfully denied. The following are some standard legal grounds for suing an insurance company:

Breach of contract

Insurance policies are binding contracts between you as a policyholder and the insurance company. If the insurer fails to uphold their end of the agreement, such as wrongfully denying a valid claim, they may be in breach of contract. To succeed in a breach of contract claim, you must prove the following:

You had a valid insurance policy.
You fulfilled your obligations under the policy.
The insurer failed to fulfill their commitments.
You suffered damages as a result.

Bad faith

Insurance companies must act in good faith and deal fairly with policyholders. When an insurer unreasonably denies a claim, delays processing, or engages in deceptive practices, they may be acting in bad faith. Examples of bad faith include:

Failing to investigate a claim properly
Misrepresenting policy provisions
Offering significantly less than the claim’s value without justification
Unreasonable delays in claim processing.

Fraud

Sometimes an insurance company may commit fraud to avoid paying out claims. This can include intentionally misrepresenting policy terms, forging documents, or other deceitful actions. If you can prove that the insurer committed fraud, you may have a strong case for a lawsuit.

We are not afraid to go against insurance companies. We will tackle them and ensure you get a fair hearing and due compensation.

Steps to take when your claim is denied

If your insurance claim is denied and you believe the denial is unjust, you should take the following steps:

Review your policy: Carefully read your insurance policy to understand the coverage, exclusions, and obligations. This will help you determine whether the denial was warranted or you have grounds for a dispute.
Request a detailed explanation: Ask the insurance company for a detailed explanation of why your claim was denied. This should include specific policy provisions and any other reasons for the denial.
Gather documentation: Collect all relevant documents, including your insurance policy, correspondence with the insurer, evidence supporting your claim, and other essential information.
Appeal the denial: Most insurance companies have an internal appeals process. Submit a formal appeal, providing additional documentation and arguments to support your claim.
Consult an attorney: If the appeal is unsuccessful or you believe the insurer acted in bad faith, consult our experienced insurance attorney. We can provide legal advice, evaluate your case, and help you determine the best course of action.
File a lawsuit: If negotiations and appeals do not resolve the issue, our attorney can help you file a lawsuit against the insurance company. This can be a complex process, but with the proper legal representation, you can seek the compensation you deserve.

Has your insurance claim been denied unjustly? Reach out to us, and let us help you!

At Leverty & Associates Law, our knowledge and years of experience in bad-faith insurance have helped us work well with our clients. We will assist you in navigating the entire legal process. We will help you prepare strong appeals, gather additional evidence, and advocate on your behalf to overturn the denial and secure the coverage you deserve. If you need a trusted team of attorneys to be your advocates, we are the ones to call.