What to Do if You’ve Experienced a Wrongfully Denied Claim or Other Insurance Company AbusesThe first step in protecting yourself is to know what actions to take if you’re being abused by an insurance company, or by one of its agents, claims examiners or adjusters. Insurance companies are powerful, but they aren’t above the law. There are three main ways to deal with your insurance company when you feel you have been treated unfairly.
One approach is to try to resolve the claim with your insurance company to come to a resolution. Usually, denied claims can be appealed, although it isn’t clear how many of these appeals end up with a different outcome. Depending on the circumstances, it is sometimes beneficial to initiate two or even all of these remedies.
A second way to deal with unjust treatment by an insurance company is to report the abuse to the state insurance regulator in your state. Often called the Department of Insurance, the state’s insurance regulator is supposed to enforce the state insurance laws and regulations code through administrative procedures. However, many insurance regulators are underfunded, understaffed and overburdened. As a result, depending on the state, relying on the insurance department to help may be futile.
The third approach is to retain an attorney to deal with and, if necessary, sue your insurance company. While it is always possible to try to sue the insurance company without an attorney, unless you are an expert in insurance, or the claim is very small so that you can handle it in a small claims court, insurance companies are experts in defending claims and are likely to put you through the legal wringer if you try to handle any meaningful case yourself.
If the insurance company has not met its obligations to you under the insurance policy the action is for breach of contract. In a breach of contract claim you are seeking the benefits that you are entitled to under the insurance policy. This might mean forcing a health insurance company to pay for a procedure that they wrongly claimed was experimental, or paying under your auto insurance policy’s uninsured motorist’s coverage if the driver who injured you had no coverage.
If an insurance company has acted in bad faith while denying your claim, you also may have a separate claim for insurance bad faith. That would enable you to recover additional damages beyond what the policy promised and the insurance company should have paid, including any additional damages you suffered because of the delay in payment, plus punitive damages, which are designed to both penalize the insurance company and deter the company from treating insurance consumers improperly in the future.
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