Nowadays, having insurance is practically a necessity. Primarily, it offers financial protection in the event of an unexpected accident or illness. Most people purchase various types of insurance to cover different events and circumstances. Sometimes, however, when something goes wrong with your policy, you may find yourself considering filing a lawsuit against your insurance company.
Here are four reasons why people choose to file insurance dispute lawsuits against their insurers.
Unfairly Denied Claims
One of the most common reasons why people sue their insurance company is when they have had a claim denied unfairly. Insurance companies may deny claims for several different reasons such as an alleged pre-existing condition, policy exclusion, or lack of evidence. If you feel that your claim was unjustly denied, then it is within your rights to pursue a lawsuit against the insurer for breach of contract.
For example, let’s say that you were in a car accident and suffered severe injuries. You submit a claim to your insurance company only to have it denied because they allege that your injuries are due to a pre-existing condition. However, after further review, you are able to prove that your policy does not have any such exclusion. In this case, you would have grounds to sue your insurance company for breaching the terms of your contract.
Unsatisfactory Settlement Offer
Another reason why people might choose to file a lawsuit against their insurance company is if they feel that the settlement offer was unsatisfactory or unfair. Insurance companies often try to limit their costs and payouts and may offer you an amount much lower than what is required to cover your losses.
In such a scenario, it may be worth considering whether or not legal action might be in your best interest. Winning a lawsuit could provide the financial coverage needed to pay for medical bills and other related expenses.
Unfairly Canceled Policies
Some people choose to sue their insurance companies when they have had their policy canceled. Insurance companies may cancel your policy without providing an adequate explanation or due process. This can be a huge hit to the pocketbook especially if you have built up loyalty points or rewards with the insurer over time.
If you feel that your policy has been wrongfully canceled, then it may be worth exploring your legal options. A lawsuit could provide you with the compensation needed to cover any financial losses due to the cancellation.
Unethical Business Practices
Finally, some insurance companies engage in unethical business practices such as making false representations or engaging in deceptive advertising. In these cases, bringing a lawsuit against the company can be an option to seek justice and compensation for any harm caused by the company’s actions.
For example, if the insurance company made false claims by saying that they provide coverage for certain medical procedures when in fact they do not, then you would have grounds to seek compensation for any losses resulting from relying on those representations.
It’s important to remember that each insurance dispute is different and requires careful analysis of the law as well as a thorough understanding of your policy. If you find yourself in a situation where you feel like your insurance company has wronged you, then it may be worth exploring the possibility of filing a lawsuit against them.