If it hasn’t happened yet, it probably will. Whether it’s a car accident, theft, or vandalism, you are not immune from experiencing a loss. When you contact your insurance company about the incident, they will initiate the claims process. It is in your best interest to follow standard procedures and consider a lawsuit to be the last resort. If things go wrong you might ask yourself, “What happens if I sue my insurance company?”
You have insurance to protect you when things go wrong, and your independent insurance agent is on your side because that is their job. After you begin the claims process, you should not view the situation as “me” versus “them.” It is not meant to be a combative procedure. Your agent will guide you through the process of collecting documentation, filing a claim, meeting with an adjuster, settling the claim, and receiving payment.
However, there are still some instances where you may feel like you should sue your insurance company. Maybe you don’t believe you were given a fair treatment during the claims process, maybe your claim was denied, or maybe you believe you did not receive adequate compensation.
To Sue or Not to Sue
Before you call a lawyer, consider all of your options. Once measures have been taken to file a lawsuit, you and your insurance company will be on opposing sides and all communication will come to a halt. Prior to suing, read through the following steps:
- Work with a Claims Adjuster
After you have experienced a loss and have made a claim, your insurance carrier will assign a claims adjuster to your case. This will be the main person you will be in contact with during the claims period. Their job is to answer your questions, gather information about your case, and assess your insurer’s responsibility to pay the claim.
Do not give the adjuster false information or hide anything. Provide them with any documentation you have pertaining to the loss, including pictures of the damage, bills or estimates for the repairs, and contact information for the repair company/contractors. If you leave out any information, the adjuster won’t be able to do their job well. This will also hinder your case if you pursue a lawsuit later.
Keep a record of the conversations, meetings, and documents you sent to the adjuster. If you have a disagreement with the adjuster during the claims process, you will have the information necessary to legitimate your dispute.
- Be Patient
Your claim won’t be resolved quickly. The insurance company (and your adjuster) are processing dozens of claims at the same time. So, don’t be surprised if it takes longer than a few weeks to settle the claim and receive a payout. Don’t jump into a lawsuit simply because you think your insurer is taking too long. They haven’t forgotten about you and will finalize their decision as soon as possible.
- Assess Your Options
There is the possibility that you may be unsatisfied with the claims process. Maybe your claim is taking longer than usual to be resolved, or that your claims adjuster is not giving your claim the attention that it deserves, or you are unhappy with the claim payout. You have other options besides filing a lawsuit.
Speak with your independent insurance agent about your concerns. They can serve as an intermediary between you and the adjuster. You can also ask to speak with the adjuster’s supervisor and request a re-evaluation of your case. Provide them with documentation demonstrating the communication you have had with the adjuster.
If your claim was denied or the payout was less than expected, contact your insurance agent. They can work with you to explain why the settlement was low. There are laws requiring the insurance company to fully explain their decision. After you understand the restrictions and limitations to your policy, you may be more satisfied with the amount you received.
- Know Your Rights
Each state has an insurance policyholder “bill of rights.” These laws are there to protect you in instances where you believe the insurer has not resolved your claim in a timely manner, has not fully communicated the reasons behind their claim decision, or has not adequately investigated your claim.
Explore your state government’s website to learn more about the bill of rights in your locale. If you believe that your rights were ignored, this may be enough justification to file a lawsuit.
Lawsuits: What to Expect
- Work with an Intermediary
Before hiring a lawyer and filing the suit, have a neutral third party fully assess your claim. Either an insurance appraiser or mediator can determine whether or not your frustrations justify legal action. They can look for any mistakes in the paperwork or missteps in the claims process and serve an intermediary between you and the claims adjuster. The appraiser will not provide their opinion on anything, but rather help to resolve the matter. Keep in mind that their services are not free and you will have to spend money out of pocket to hire them. However, the fees incurred would be far less than if you file a lawsuit.
- File an Appeal
Your insurance company may be willing to negotiate the settlement amount if you are unsatisfied. For this, you need to contact the carrier’s customer service department directly in order to file the appeal. Politely tell them about your claim and provide them with any information they may need regarding the claim. Then, ask if anything can be done to increase the payout. This may involve some appeals paperwork that they will send you in the mail or by email.
The insurer may offer to increase your payout, but if you are still unsatisfied, file another appeal through your state’s insurance bureau. They will request that you fill out paperwork pertaining to your complaint. Then, they will contact both you and your insurance company and investigate the claim. It may take several weeks to reach a decision, depending upon the claim.
- Hire an Attorney
If you are still not satisfied and want to proceed with the lawsuit, hire an attorney that specializes in insurance claims. Your insurance company will also hire lawyers to defend themselves in the case.
- Lawsuit Procedures
Once the lawsuit is filed, your insurance company will no longer speak with you until things are resolved. This may cause issues if you have multiple policies with the same carrier because you will not be allowed to communicate with them about any other insurance-related matters. Your lawyer may suggest writing to the insurance company for permission to speak with them about your other policies.
Both sides will have a chance to examine all of the evidence and documentation about your claim. You may have to provide a deposition as part of the data collection (also called “discovery”) period.
It is unlikely that your suit will ever be heard in a courtroom. Instead, there will be a period of negotiation and you will be offered a settlement. More that 90 percent of lawsuits are settled. You will need to speak with your lawyer and determine whether or not you accept the terms of the settlement. If the suit does go to court, expect to testify.
The lawsuit will cost you money in fees to your lawyer and the court. There will be costs for filing paperwork too. If you lose, you will unlikely be able to recover your losses. Also, the decision could take years before it is finally resolved. If you depended upon your claim payout as a means to repair or replace your car, then you will have to find other ways to pay the bills.
However, there may be some benefits too. If you win you case, you will recover the money owed to you in your claim, the legal fees owed to your lawyers, as well as the emotional losses you suffered before and during the claims processes.
Speak with Your Agent
If you have experienced a loss, contact your independent insurance agent right away. They have the knowledge and experience necessary to start your claims process quickly. Expect a claims adjuster to contact you shortly after the claim has been opened. Hopefully, the process will proceed smoothly and you will have no need to eventually file a lawsuit.
While the majority of people want an agent involved in their purchase of insurance, many people want to see if they can save money by buying direct from the insurance company. Others want to try a direct quote to make sure the premium they’re now paying through their local agent is fair. If you want a quote for your coverage, click on the competitive quote button on the right side of this page.
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