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At what point can I sue my insurance company for denying claims?

On Behalf of | Jun 24, 2021 | Insurance

You contracted with your insurance company to provide you with a certain amount of coverage. You’ve dutifully made your monthly payments and upheld your end of the bargain. It can be extremely frustrating, then, when your insurance company decides to deny your claim when you need it most.

If this happens to you, you might be wondering at what point your insurance company’s actions constitute a breach of your contract. A breach of contract could give you the chance to bring a lawsuit against them to get the compensation you contracted for.

What they are allowed to do

There are many reasons why an insurance company might justify refusing your claim. Reading the fine print of your insurance plan contract is important, because it often contains several different claim conditions that allow your insurance company to deny your claim if they are not met.

For example, insurance companies sometimes set time limits within which you must notify them of your injury. These time limits are often short – sometimes as short as 24 hours. Even though you have a lot on your mind immediately after an injury, it’s important to file a claim as quickly as possible to avoid a preventable claim denial.

What they are not allowed to do

An insurance company cannot blatantly deny your claim when it’s clear that your situation qualifies for a payout. When they do, it is often a simple matter of proving in court that the denial was made in bad faith.

Another time when you can justifiably bring a lawsuit against your insurance company is when they do not either approve or deny your claim within a reasonable time. In your insurance contract it gives you a time window within which you can expect to know if the company is going to approve your claim. Keeping you waiting past this time window can cause problems, since you likely have medical bills, missed days of work and other expenses to worry about.

Improper denial of insurance claims adds a considerable amount of stress to an already difficult situation. If your insurance company improperly denies your claim for a reason not listed in your insurance contract, you may be able to use a lawsuit to obtain the compensation that your contract entitles you to.