family cutout under a life insurance umbrella

What to Do If Your Insurance Provider Denies Your Claim

Coping with a loved one’s passing, injuries, property damage, or similar hardships is difficult enough as it is. Add to that the fact that your insurance company denied your insurance claim that everything just feels extra overwhelming.

Fortunately, there are laws in place to safeguard people like you because it’s relatively common for insurance plan holders to have issues with insurance providers come claim time. If you have yet to contact a life insurance lawyer in Los Angeles for your claim, below are some basic information regarding taking legal action against insurance companies.

Should I File a Lawsuit Against My Insurance Provider for Denying My Insurance Claim?

All insurance companies have legal obligations to their policyholders and should follow the insurance policy or plan’s terms and conditions, refrain from conducting unfair practices, and must always do so in good faith.

The specific obligations differ from one state to the next because each state regulates its insurance industry. These duties, however, usually require that insurance providers avoid these unfair practices:

  • Refuse to pay out an insurance claim when responsibility or liability is justifiably clear.
  • Delayed and insufficient claims investigation.
  • Deny an insurance claim without giving sufficient reason why.
  • Failure to deny or approve an insurance claim within a predetermined or reasonable timeframe.
  • Refuse to pay out a claim according to a misstatement on the application following the deadline for the contestability period.
  • Failure to defend a claimant in a case in which one or more of the claims should’ve been covered under the claimant’s liability policy.

lawyer writing on a book

What Legal Options Do I Have?

As mentioned above, every state has its own laws and rules that regulate their local insurance industry, which include the specific kinds of lawsuits you could file against your insurance provider. In general, each state laws against breach of contract because your insurance plan is essentially a kind of contract.

Most states likewise allow bad faith insurance actions. Also, there’s a chance that you could sue your insurer for unfair trade practices as each state have statutes or codes that directly address insurance trade practices.

Seeking Legal Help for Your Denied Insurance Claim

A lawyer with ample experience about life insurance claims will be able to inform you of the most appropriate legal action for your specific case and the types of damages you can seek. Do note though compensatory damages like lost wages and medical bills are usually available in most cases.

Punitive damages may only be available in certain lawsuits based on court or state rules.

That said, if you truly believe that your insurance provider denied your claim in bad faith or without justifiable cause, you could take the necessary legal action against them. It’s also best to seek advice from a reputable insurance lawyer.

Do this even before your insurer denies your claim if you strongly feel that they’re being unfair in any way. In many cases, knowing that a claimant has a lawyer on their side could scare an insurance provider to shape up and honor their duties.