Sometimes Insurance companies act in bad faith which affects the insured in some situations like not paying them their claim or underpaying their claim. So if you have an insurance policy in place and the insurance company is not willing to pay you your claim after suffering a loss you may resolve to litigation (the process of taking legal action) to get paid for the loss you suffered. Before suing your insurance company, you should have a proper and detailed understanding of the grounds on which you can sue them and the process to follow when applying for a lawsuit.
If most people were asked to give reasons why they couldn’t or didn’t sue their insurance company, there’d probably be responses like “I didn’t know I could sue them”, “I couldn’t afford to hire a lawyer”, “the process probably consumes time and I don’t know how to go about the whole process”. The right response to this question is that YES you can sue your Insurance company as long as you learn and know about the right processes to do that.
Table of Contents
What Is Insurance?
Insurance is a term used to refer to an agreement or arrangement between a company and a person, where the company has agreed o take responsibility for compensating the insured in a case of specified loss, damage, illness or death in exchange for a specific amount of money known as PREMIUM. It is basically a way to manage your risk i.e purchasing protection against unexpected financial losses.
What Is an Insurance Policy?
In Insurance, the Insurance Policy is a document that shows the proof of the agreement and the terms and conditions of a contract. It is a legal contract between the insurer and the insured. It is mandatory to understand the contents of the insurance policy to verify if it meets your needs and that you understand your responsibility as well as that of the insurance company once a loss or damage is incurred.
Types Of Insurance Policies
Oftentimes, unforeseen circumstances occur that we cannot prevent from happening, but then we can manage them and protect ourselves from the worst through insurance. The following are recommended insurance policies:
1. Life Insurance
This is an agreement, arrangement or contract between the insurance company and the insured or assured, where the insurer is expected to pay a specific amount of money upon the death of an insured person or after a set period of time.
2. Health Insurance
This is an insurance policy that covers the cost of the medical expenses of the insured in exchange for a specific amount of money called PREMIUM.
3. Auto Insurance
This is an insurance policy that provides financial protection against the physical damage of a vehicle as a result of accidents to theft. In exchange for the premium paid by the insured, the insurance company agrees to pay you in the occurrence of an accident or theft as it is stated in the insurance policy.
4. Long-term Disability
This insurance type provides protection from loss of your income if you become unable to work as a result of an accident, illness or injury. Here an employee is provided financial benefit if they are unable to work for a long period of time.
The Importance of Getting an Insurance
Getting insured is one of the most advisable thing to do because it protects you from occurrences of unexpected events and also helps you manage risks. Being insured ensures that you’re financially secured to face any kind of unforseen circumstances when they occur. The following are reasons you should get insured.
- It helps you to manage your risks. Risks happen unexpectedly and sometimes can not be avoided, but when you are insured, your risks can be managed. As at the time of the occurrence, you are financially secured and helps prevent setbacks.
- It ensures family and business stability. The stability of the family and business can be assured through an insurance policy such as life insurance should the life of a member be lost.
- Insurance guarantees you a coverage. The premium paid by you to the insurer gives you an assurance that in the case of an unforseen circumstances the company would cover the damages that was incurred.
- It controls setbacks and stress during difficult times. As much you try to manage your daily activities to avoid loss, damages or theft, sometimes things could still go wrong which can completely change the narrative leaving you emotionally, physically and financially drained, but an adequate insurance policy put in place can help out during such times.
On What Grounds Can I Sue my Insurance Company?
There might be several reasons as to why you want to sue your insurance company. For instance, when an insurance company acts in bad faith the insured might want to sue the insurance company for not staying true to the contract. But then, before filing a lawsuit ensure you have a detailed understanding on how to go about that, the processes that should be followed, the things that should be put in place and the legal action that can be taken against your insurance company.
- Failure to pay your claim as agreed. When your insurance company is denying you of your claim and are failing to pay you the claim as expected when there is an occurrence of loss without no legitimate reason or deciding not to pay the claim a stage time due then you can decide to sue your insurance company. If you believe your claim was irreasonably denied and your insurer (the insurance company) is not willing to pay them you can look into it’s and decide to sue them.
- Breach Of Contract
- When your insurance company fails to act according to the terms and agreement of the contract or breaks a rule under the contract or act against the rules guiding the contract then this could be a “breach of contract” and could be a reason as to why you should sue your insurance company.
- If the insurance company acts in a way that violate the right of the insured (you), and the insured feels cheated or feels the insurance company acted in a way that was unfair to them and there are proofs that the actions of the company we’re deceptive then you can sue them for violating your rights as the insured.
Processes Of Suing Your Insurance Company
- Hire a Lawyer: You need to hire a lawyer to defend your cause if you feel cheated by your insurance company as it is not something you can do yourself.
- The lawyer you hired and that of your insurance company would carry out proper investigations to know more about the dispute caused between you and the insurance company and this is done through a process called “Discovery” (exchanging of documents and conducting depositions).
- You would incur expenses while trying to sue your insurance company expenses such as court costs and the cost of hiring a professional lawyer.
NOTE: Depositions is a way of finding facts under oath done by the insurance company lawyer formally.
Conclusion
If you feel your insurance company has acted in an unfair way to you and has gone against the terms of the contract or are not budging or willing to agree to settle. Then yes, you can sue the insurance company as long as there is a proof to which they have breached the contract.