Most people resolve their insurance disputes without needing legal action. But sometimes, your only option is to file suit. If this is the case, you must gather all documentation of your claim so your attorney can review it.
This article discusses the documents and records your attorney will need to win your case. This section also describes situations where you would need to take legal action against an insurance carrier.
There Are Several Types of Insurance Policies
Most of us assume that insurance litigation is limited to home insurance claims for property damage. But many types of insurance policies can give rise to legal action.
Some of the more common types of insurance policies include:
The trick about insurance litigation is that your attorney will need detailed information on the insurance dispute and the underlying accident or injury.
Why Would You Need to Sue an Insurance Company?
Claimants rarely have to sue an insurance company. Even when they deny a person's initial home insurance claim or property damage claim, they eventually resolve it. But there are times when the insurance adjuster refuses to pay. Or they'll only offer a partial payout.
Legally, for an insurance company to deny a claim, they must have a legitimate and reasonable basis to do so. For example, if the carrier canceled the policy for non-payment, the courts would not expect the insurer to pay a claim.
The same applies if the claimant was responsible for the accident or damage. Your claim may not be payable if you suffered water damage because you failed to fix or remove a faulty water heater.
Before you sue an insurance company, you should meet with an insurance law attorney. They'll review your case and let you know if it's worth pursuing. If there is sufficient evidence that the insurance company acted in bad faith or breached the terms of your policy, it may be worth filing legal action.
How Can Your Insurance Claim Attorney Prove Bad Faith?
Few attorneys file bad-faith lawsuits against insurance companies because they're difficult to win. It's not enough to show that the defendant should've paid your claim. You must prove the elements of a bad faith claim to collect damages.
Each state has a set of insurance laws dealing with insurance disputes and bad faith claims. In some states, your only recourse will be to file a breach of contract claim. Other states allow you to sue under breach of contract or bad faith.
To prove bad faith on the part of your insurance company, your attorney must demonstrate the following:
- The insurance company failed to pay benefits according to the terms of your insurance policy
- The defendant lacked a reasonable basis for this failure to pay
- You suffered a loss as a result of the insurance company's decision
If your attorney can't prove all three elements of a bad faith claim, you will not prevail.
What Evidence Can Your Attorney Use To Prove Your Claim?
In most personal injury cases, your attorney has different types of evidence. For example, in a car accident claim, they have the police report, the mechanic's estimate, and pictures of the accident scene. In a property damage claim, they can submit copies of the damaged item's appraisal. With an insurance lawsuit, it works a bit differently.
The evidence available to your insurance dispute attorney includes the following:
- Expert witnesses (insurance agents) who have the necessary know-how about standard business practices in the insurance industry
- Testimony and reports from a public adjuster who reviewed your claim
- States in your state dealing with unfair settlement practices
- Copies of the insurance company's corporate policies and procedures
- Documentation from your underlying insurance claim or accident
The more evidence you have, the better your settlement offer will be. Remember, the insurance company and their legal team will make a lowball offer to start. Your attorney will negotiate a better offer once they get closer to trial.
Most Insurance Law Disputes Settle Out of Court
Sometimes, your attorney will need to take your case to trial. But this is rare. More than 95% of all lawsuits settle out of court. This is especially true for small claims. It isn't worth spending thousands of dollars to fight a small to mid-size claim.
Plus, trials aren't in anybody's best interest. They're time-consuming and expensive. There's also the risk that you could lose. It's often better to settle for a reduced amount rather than walk away with nothing.
Most of the time, your lawyer will negotiate a fair settlement sometime before trial. It may only happen on the eve of the trial. The insurance carrier may want to wait until the last minute, hoping that you'll back off. Or they may want to hold on to their money for as long as possible.
Provide Your Personal Injury Lawyer With Records Related to Your Claim
Once you retain your attorney, you'll need to give them all documentation related to your claim. This includes records about your insurance claim and evidence from your underlying accident or loss.
Some of the types of records you must submit to your attorney include:
- A copy of the insurance policy at issue
- Copies of your other insurance policies (remember to check your credit card information)
- All correspondence with your insurer
- Phone logs and message pads if they refer to your insurer
- All notes of telephone conversations with your insurer
- Documentation relating to the covered incident at issue
- Estimates or adjuster's reports that show your damages
- Canceled checks that show your damages
- Bills and invoices that show your damages
- Files from litigation resulting from the covered event
- Correspondence threatening or warning of litigation resulting from the covered event
- Files from previous attorneys
Your attorney needs this information to give you sufficient legal advice. The claims process can be complex. Your personal injury lawyer needs to see what happened at each step of the process. They also need to know your insurance coverage's specific terms.
Policyholders don't always hold on to the above-referenced records. That mistake could cost you thousands of dollars.
Select an Attorney With Years of Experience Handling Insurance Litigation
If the insurance company denies your claim or acts in bad faith, you need help. The last thing you'll want to do is take on the insurance company on your own. Speak with an insurance lawyer with years of experience handling insurance cases.
Ideally, your attorney will settle your claim with the insurance company. If this isn't possible, they will file suit on your behalf. Before you decide how to proceed, schedule your free case evaluation.
Consult Findlaw.com's insurance attorney directory to find an experienced lawyer near you.