How to sue an insurance company?

by ty_ger88 » Fri Sep 14, 2007 02:20 pm

Many a times you may be unhappy with your insurance company for not paying you your dues or for delaying your payments or for any other reason. Your insurance company does not always have the upper hand. There are laws to protect you if you have a dishonest insurer.

When can you sue your insurance company?

You can sue your insurance company on grounds of:
  • Bad faith and
  • Breach of contract

If your insurer tries to trick you by not paying up a legitimate claim you can put up a civil suit against the company for having acted in bad faith. A company shows bad faith when it unreasonably denies a legitimate claim. This may mean that:
  • The company has failed to carry out proper investigations
  • Undue delay in processing a claim
  • Disregarding the rights of the policyholder
  • Inadequate compensation provided against claim filed

You can sue your insurance company for the full amount of benefits that has been denied to you as well as for any economic loss or emotional distress that you may have had to suffer as a result of the refusal. If your insurance company has been dishonest you may also get punitive damages. This is a means to make the insurance company behave more responsibly in future correspondences.

It is good to keep all paper works organized so that you can find them as soon as you need them. You may think of an old receipt as unimportant but it might hold great importance when you have a case standing against your insurer for bad faith or breach of contract.

Related Readings

I'm confused, please help. Here's my story and question. I'll try to make it short. My car was hit about a month ago. I was not in the car. It was parked on the side street. The driver of the truck that hit me left a note with all of his information. Now, it has been almost a month, and his insurance is not doing much. At first, they promised to have the damage estimated, but then nothing was sent to the car shop where my car located. I ended up going through my own insurance company. The problem is before I went with my insurance company, I had rented a car and had discussed this with the other insurance company. They said they would reimburse me all the fees. Now, they're not answering my calls. They keep on telling me that the agent is busy and will get back to me. It has been 4 days since I faxed in my car rental bill. What can I do? Can I sue them? Would you tell me how to sue an insurance company? The bill was paid for by my credit card, and I don't want to owe interests on it. Please help. Thanks.

Total Comments: 380

Posted: Sun Apr 17, 2011 06:02 pm Post Subject:

Any advice?

As them for a Proof of Loss form is this is not what you are completing. Mail it back in certified mail along with a letter stating that they need to issue payment within 30 days. In the meantime, file a complaint with the Dept of Ins for your state.

Posted: Tue May 03, 2011 05:06 pm Post Subject: House Break in

My friends house was broken into a week ago- they threw a brick through the window. The insurance company stated that he could not do anything - even secure his house without their window specialists inspecting it first - the company rang promptly, but could not come out for a week to inspect the property, naturally my friend had to secure the property. Damage done to the inside of the house was dismissed as irrelevant - ah we will get someone out at some point to look. And then the items taken due to him not having receipts - although the police had taken all the details he was unable to claim for. So for the excess of £200 he would have received very little - and the possibility of a further break in as he was told not to touch the window.

I would like to know where he would stand it attempting to get some money back from the insurance company - Churchills. Oh he arranged the window repair and mended the doors - but is out of pocket for the possesions stolen which the insurance company will not replace,,, what is the point of insurance???

Advise please

Posted: Tue May 03, 2011 07:28 pm Post Subject:

First, post a new thread if you have a new question.

Have you sent your insurance company a Proof of Loss form? If not, obtain one from them and send it Certified Mail. They have to issue payment within 30 days or advise you as to a reason they are not issuing payment within that time (in writing).

Also, file a complaint with your states Dept of Ins.

Posted: Tue May 03, 2011 10:09 pm Post Subject:

You're in the UK. Most of us are here in the US. Although the laws should be similar, you'll have to ask someone with specific knowledge of the insurance laws in the UK as to what the entitlement should/could be.

Receipts for stolen items is not usually a requirement, although it can help to have them. Most property insurance here in the US is based on "Actual Cash Value" and may permit "Replacement Cost" coverage. The ACV = replacement cost minus depreciation. Replacement coverage would provide the ACV payment up front for your loss and later fill your pocketbook after having purchased the replacement property and providing copies of receipts for the new property.

Posted: Wed May 04, 2011 09:55 pm Post Subject: Geico screwing me over

I had a DUI a couple months ago. I called GEICO while I was dealing with the whole deal. They told me that my policy would not change due to the details of the accident. They specifically told me that my policy would not change. A month after the accident I receive an envelope from GEICO stating that I have to pay 200 extra dollars. They tell me it was a "misunderstanding" when it was obviously false information. What would be the right legal action to take? I am in the state of California and the government is broke here. It is horrible how they treat the general public here. Please help. Thank you

Posted: Thu May 05, 2011 04:26 am Post Subject: workers comp.

I have a case wer the insurance provider. has denide my claim, i was hurt while i was at work. they tell me that it was not work related....what should i do. my lawyer tells me that florida is one of the hardest states for workers comp claims..any advise :(

Posted: Thu May 05, 2011 05:01 am Post Subject:

A month after the accident I receive an envelope from GEICO stating that I have to pay 200 extra dollars



Unless you are driving a different vehicle now, they generally cannot change your premium except at the next renewal. Are you at that point now?

This has nothing to do with our fine, bankrupt State of California. It has everything to do with your risk as a driver. A DUI conviction and/or an at-fault accident can cause your premium to increase.

That someone told you over the phone that would not happen is unfortunate. But unless you have it in writing, signed for by an executive officer of GEICO, you are out of luck.

Posted: Thu May 05, 2011 05:04 am Post Subject:

I have a case wer the insurance provider. has denide my claim, i was hurt while i was at work. they tell me that it was not work related....what should i do. my lawyer tells me that florida is one of the hardest states for workers comp claims..any advise



Either you were at work or you were not. Can you prove you were at work when the injury happened? Or did you come to work with an injury and try to make it look like it happened at work? On what basis is your employer telling you that your injury is not work-related?

The attorney you spoke to is an idiot. Either this is or is not a work related injury. It is not harder to file a claim in Florida than anywhere else in the US.

Posted: Wed May 11, 2011 03:38 am Post Subject: Screwed by the insurance company

My Son was seen by a speech therapist weekly for about 12 visits. I discussed with her before she started that I could not pay out of pocket and that I needed insurance to cover her visits. I also told her I only had 30 visits for therapy. She said "no problem, I bill weekly so we'll monitor it and we'll know when your sessions are running out". (my son was also receiving PT and OT weekly which also counted toward those 30 therapy visits.) The billing person who was filing the claims for the speech therapist notified me that she spoke with my insurance company and that my visits were about up. I stopped the therapy at this time. About a month later I received an invoice from the speech therapist indicating that 6 of her visits did not get covered and that I was responsible for the balance. She told me they were not covered because they were rejected from the insurance company for having a wrong national provider number on the claim but she insists they were submitted with the correct National Provider Number and she has no idea why Blue Cross rejected them. She says the same provider number was on the claims that were rejected as the claims that got paid. The insurance company is not acknowledging that they ever received those claims or that they rejected them. If they rejected them, they didn't notify me or the provider. Now I'm getting sued by the speech therapist for the 1,048.00 balance that I don't feel like I should have to pay! I offered her $500.00 as a settlement and she wouldn't take it. Can I sue the insurance company in this case?

Posted: Wed May 11, 2011 06:10 am Post Subject:

The insurance company is not acknowledging that they ever received those claims or that they rejected them.



You mention that the insurance company is Blue Cross. If that is correct, your statement above is an impossibility -- unless your son's therapist never filed the claims. Why? Because Blue Cross has only accepted claims submittals electronically for the last 5-7 years (or more). No more paper -- everything is required to be uploaded from the provider's office to the insurance company via computer on a daily basis. If Blue Cross never received the claim because the provider failed to submit it, then you have what is known as an "affirmative defense" against the therapist's claim.

Besides this, Blue Cross sends you an "Explanation of Benefits" notice for every claim they pay, showing the billed amount, the allowed amount, the patient's responsibility, and any amount that is not the patient's responsibility. So you should have known whether or not they were receiving and paying claims, and what your financial responsibility is.

On the other hand, every state has "Unfair Claims Practices" laws that govern the acknowledgment of claims. If your statement is correct, this is a violation of state insurance laws and needs to be reported to your state's Dept of Insurance.

If the claim is payable by your insurance company and you are being sued by a provider who submitted a claim to the insurance company, then you need to respond to the lawsuit and file a cross-complaint against the insurance company. This is a complex matter and you should not attempt to handle this on your own.

You would want to make sure, however, that your attorney makes a demand in his legal filing for an award of attorney's fees, because if he/she fails to do that, no matter how much the court would be willing to award them to you, it cannot.

Understand, however, that when all is said and done, if by the time all these claims from the therapist are (or should have been) presented to the insurance company, if your benefits are/were exhausted, then you remain personally responsible for the unpaid amounts. You made that agreement when you established your son's patient relationship with the therapist. You can fairly argue that the therapist was acting as your agent (you probably signed a form to do that, too), and if your agent failed to submit the claim, then they are responsible for the provider's losses under the theory of professional liability resulting from negligence.

Since they are both agent and provider, and because they caused their own loss, you would be relieved of any responsibility that would rightfully have been paid by the insurance company. To determine that might require a medical billing forensic expert who can piece together all the claims in combination with all the other claims, and then create a timeline showing what claims should have been paid when. .

And, as I look back over my response, I have one more question: Are you being sued in civil court or being taken to arbitration? Almost all physicians, surgeons, therapists, and other medical providers have their patients execute a binding arbitration agreement for the purpose of avoiding any time and expense involved with going to court. If you signed one of those, and are being taken to court instead of arbitration, then you have the right to petition the court to order all parties to arbitration. The existence of a lawful arbitration agreement FORCES the court to grant your petition.

Again, there are too many unknowns presented here. As much as I try to help folks avoid them, this is one instance where a good attorney will save you a lot of grief and, perhaps, some money, too.

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