What is Insurance Law?

People have insurance for their houses, their cars, and themselves. If anything breaks, they file an insurance claim, and the company sends out their adjusters. The claims process should take, at most, a few weeks or months.

When it does, you need an insurance attorney. Insurance law may be part of other legal practice areas, such as personal injury, medical malpractice, or real estate law. If you're in a car accident and file a personal injury claim, you deal with insurance law. What does all that mean for you?

Definition of Insurance Law

Insurance is a type of contract. The policyholder, or "insured," pays a premium to the insurance company (the "insurer"). In exchange, the company promises to pay for certain types of losses ("coverage") if they occur.

Insurance coverage and payouts depend on the type of insurance and the nature of the claim. Auto insurance and homeowner's insurance cover property damage. If you're in an auto accident, collision insurance will pay for repairs but not medical bills. You need a different type of coverage for that.

In personal injury and property damage cases, attorneys work on a contingency basis so that attorney's fees are part of the award if you win your case. A contingency fee agreement may also include court costs to reimburse filing fees.

Public and Private Insurance

There are two broad areas of insurance: government insurance and private insurance. Both follow federal and state laws for claims management. They differ in claim administration and payment.

• Government insurance includes Social Security, workers' compensation, unemployment, and disability. Premiums for these policies come from a worker's paycheck and return if the worker needs them or is on retirement.
• Private insurance can cover just about anything. Health insurance, car insurance, and property insurance are the most common, but exotic coverage such as artwork, collectibles, and pet insurance is available.

Insurance Disputes

Insurance disputes arise when the insurance company refuses a claim or won't pay the total amount. In most insurance claims, the claims adjuster reviews the claim and assesses the damages. The adjuster may feel the damage is less severe than first thought or may have less expensive alternatives for repair. When the company offers a settlement offer that the insured doesn't agree with, they need legal advice before making their next move.

Good Faith vs. Bad Faith Negotiation

Despite bad press and comedians' jokes, most insurance companies are not trying to cheat their clients. If policyholders have paid their premiums faithfully, they deserve a fair settlement offer for their claim.

In some situations, such as an auto accident, more than one insurance company may get involved. If you have liability insurance, and the other driver has insurance, the two companies must determine who was at fault in the accident before agreeing on a settlement amount. Some cases, such as homeowners insurance claims after a natural disaster, depend on other agencies' determinations. For instance, in Florida, payouts after a hurricane must wait until the state distributes emergency funds.

Claimants need attorneys when the opposing side is negotiating in bad faith. "Bad faith" is a blanket term for many shady practices and includes:

• Misrepresenting the terms of a policy after the fact
• Failing to pay a claim without good cause
• "Lowballing" a claim or paying less than the total amount
• Failing to investigate the claim fully
• Unreasonable delay in processing the claim

Not all insurance companies are reputable. Some will offer a quick claim settlement for less than the total damages. Others may state a policy does not provide the coverage the insured thought it did. Anyone encountering this type of bad faith needs an insurance claim lawyer immediately.

Not all delays or reduced payments are bad faith. For instance, damage claim processing after a major natural disaster can take months longer than usual because of the number of claims. Insurance agents will recommend a less-expensive auto repair shop to limit costs. That's their job. The right lawyer can help you with these good-faith negotiations and get a reasonable settlement.

Finding a Good Insurance Lawyer

In a personal injury case or property damage case, you should always have legal assistance when reviewing or signing any documents. If you're getting a life, car, or home insurance policy, you should have an attorney review the paperwork. They can explain any confusing terminology and ensure you're not signing away any rights to challenge or appeal the claim.

How can you find the right lawyer for your case? Start with a lawyer referral service and narrow down your insurance case and the attorney you need. Take the time to look at the attorney's bio on their website or the state bar association site. Insurance companies have their own attorneys; many personal injury attorneys worked for them and earned years of experience as insurance defense lawyers.

Use the lawyer referral service to find an insurance lawyer in your area.