There are a variety of reasons to sue an insurance company in civil court. Here is how to sue an insurance company in California.
Reasons to Sue an Insurance Company
An individual can sue an insurance company if the insurance company violates or fails the terms of the insurance policy.
Insurance companies have many obligations to their policyholders: they must abide by the terms of the contract, act in good faith, avoid unfair practices, and are required to refrain from the following behaviors:
- Refusing to pay a claim where liability is reasonably clear
- An inadequate or delayed investigation into the claim
- Denying a claim with little to no reason for the denial
- Failing to deny or approve a claim in a specified or reasonable timeframe
- Failing to help you in a lawsuit despite having one of your claims covered by the insurance company
If an individual has good reason to believe that their insurance claim was unfairly denied, and the insurance company refuses to change their mind, you can pursue legal action against the insurance company. Contacting an insurance attorney prior to filing a claim against your insurance company might assist an individual in changing the insurance companies mind.
Types of Legal Action I Can Take Against my Insurance Company
In California, an individual can pursue a breach of contract lawsuit. For example, the insurance company had clearly violated the contract they had with a customer; the customer can now pursue legal action. In California, an individual can also file a bad faith tort lawsuit against their insurance company. Bad faith in this scenario would be defined as the insurance company unreasonably refusing to assist their client. In California, suing an insurance company under unfair trade practice laws is common. Most lawsuits against insurance companies will be civil cases that are dealt with in small claims courts.
Related: Civil vs Criminal Law: The Difference
Important Tips When Suing Your Insurance Company
- Document any correspondence with the insurance company and its representatives. Take physical notes of phone conversations, including times, dates, and names of representatives.
- Maintain records of your insured property and provide pictures of your property, such as your car or home.
- Keep records of all expenses that you incur, such as repairs, attorney fees, medical bills, and lost wages.
FAQS
What type of damages can I obtain in a breach of contract lawsuit?
Compensatory damages are the most common form of compensation that plaintiffs receive in breach of contract lawsuits.
What is California’s statute of limitations for bringing a lawsuit against my insurance company?
In California, the statute of limitations to file a lawsuit against your insurance company is four years from the denial.
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