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Insurance litigation is the area of law that deals with disputes arising between insurance companies and their policy holders. An insurance company has a legal obligation to act in good faith and cover those damages specified in the policy. As a consumer you should not rely on the good faith of the insurance company
Acting wisely before purchasing an insurance policy will protect your interests. It is very important that you fully understand the insurance policy before you sign any contract. Only the terms listed in writing on the contract are legally enforceable. Many people have been ripped off because they accepted the promises of unscrupulous sales agent. It is a good idea to have an insurance policy attorney read the contract with you and explain any confusing language.
If you fully understand the terms of your policy you will be in a better position should you need to file a claim. If your claim is denied or if you are unsatisfied with the settlement offered by your insurance company you have several options available. Because laws differ between different states you should consult an insurance litigation specialist who is familiar with your local laws.
Every insurance company has a policy, specified in the contract, for dealing with disputes. Most states require you to follow the companies own procedures before filing an insurance litigation lawsuit. If the company's appeal process fails to deliver a fair settlement, you should find an experienced insurance litigation attorney.
An insurance litigation attorney will send the insurance company a demand letter. This letter will outline the extent of your injuries, the medical expenses you have incurred or expect to in the future income you have lost and any other damages you have suffered. The letter will include a demand for a specific sum of money that you expect to receive.
The initial demand is a starting point for negotiations and should be much higher than what you actually are willing to settle for. The negotiations between an insurance claims lawyer and the company can last for months as each side trades settlement offers and counter offers. Most claims cases settle through this process.
If you cannot come to terms with your insurance company through negotiations further legal action may be necessary. Many cases are settled through arbitration. In arbitration both sides present their case to a neutral arbitrator who makes a legally binding final decision. The arbitration decision cannot be appealed except in extreme cases. Many insurance contracts have clauses requiring disputes to be settled through arbitration.
The advantage of arbitration is that case can be decided quickly and at a much lower cost than a court case. Furthermore arbitration decisions are final which can help bring a dispute to a quicker conclusion and allow you to receive your money sooner. Going to arbitration is a big risk as you have no chance to dispute an unfavorable ruling. An attorney specialized in insurance claims will be able to advice you on the advantages and disadvantages of settling through arbitration.
The laws require insurers to act in good faith when settling claims with policy holders. If you believe that your insurance company has not acted in good faith you can file a bad faith claim in the courts. Denying legitimate claims, offering claims that are below fair value and delaying payment excessively are examples of bad faith.
A good insurance litigation attorney should be able to get you the money owed to you under the policy as well as compensation for the suffering caused by the insurance company's poor response. These damages include injury suffered from the delayed payment, emotional distress and legal fees incurred fighting the claim.
The actual objective terms of the contract you signed are what matters in the legal case. However, if the language of the contract is confusing or ambiguous the courts tend to side against the insurance companies. If a passage can be interpreted in more than one way the law will interpret it in a way that is beneficial to the claimant.
To win a bad faith lawsuit the plaintiff must show that the insurance company failed to meet the expectations set out in the policy. Other factors such as intent and the company's past practices can impact the damages awarded, but are not essential for the case to succeed.
In some states, deceptive advertising or sales pitches by the insurance companies can also be grounds for a bad faith claim. In other jurisdictions, the agent who sold you the policy can be liable if they promised benefits not covered in the policy.
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