Insurance Disputes FAQs

If an insurance company fails to honor its contract, you have the right to file a civil action against the insurance company. Beyond suing for a "breach of contract" you may also be able to file a tort claim, seeking damages for bad faith on the part of the insurance company.

The denial of any type of insurance claim may subject the insurer to damages that go above and beyond what the insurance policy stated. All kinds of insurance are covered, including; auto insurance, disability insurance, life insurance, property insurance, health insurance and so on.

Yes, in certain cases. If the denial can be shown to have been unreasonable, you might also get "consequential damages" (money you had to pay because of the denial), and "extra-contractual damages" (to compensate for mental and emotional distress caused by the claim not being honored). Also, in some cases, "punitive" or "exemplary damages" may be awarded to convince the insurance company not to do the same thing for similar claims in the future.

The insurance companies must handle your claim in a prompt manner, in a reasonable manner, and in "good faith." In "good faith" means the insurance company must:

• Pay or deny a claim within a reasonably prompt time
• Cooperate with you regarding the claim - i.e. answer your phone calls and letters in a reasonable amount of time
• Tell you (in writing) exactly why they are denying the claim
• Attempt to find a basis to pay the claim rather than find reasons to deny it
• "Play Fair" with you.

As the insured, your obligations are:

• To timely submit your claim for benefits (most policies say how long after a loss has occurred that you must file)
• To prove all information that the insurer reasonably asks for (if it is entitled to it under the policy or the law)
• To give a statement under oath concerning the claimed loss (if the policy requires it)
• To generally cooperate with the insurance company regarding the loss (allowing them to inspect damaged property, etc.)