14 tips for suing your insurance company

Sometimes the insurance claim process doesn’t work the way it should. Maybe you’ve been denied an auto insurance claim that you think should have been approved. Maybe you’ve been forced to settle for less money than you think you’re owed on a home insurance claim. Or maybe you feel like your insurance company is trying to take advantage of you.

In these instances, it may be time to sue.

Here are 14 tips to follow before and after taking your insurance company to court.

When should you call an attorney?

1. If the insurance company is sending you to its attorney, it’s probably time for you to call one as well.

suing your insurance company

Lynette Simmons Hoag, a Chicago attorney who focuses on insurance law, says: “This is like being called in to confess you killed your wife. The insurance company’s lawyer is not on your side, and they have the upper hand.”

2. If you’ve experienced an excessive delay in payment of your claim, that’s a sure sign that something is wrong.

“I don’t mean a month or couple of weeks, but if it’s dragging on with no conclusion in site,” says Hoag, adding that you should contact a lawyer before a claim is denied. “Once a claim is denied, the door is shut. It’s like bringing a dead body back to life. I’ve done it before, but it’s much easier if we get to work before it’s denied.”

3. If your claim is denied and you think it shouldn’t have been, get legal assistance.

“If you don’t have coverage for something like jewelry and it’s denied, a lawyer can’t help you,” Hoag says. “But if you have coverage and the claim is denied, it’s time to call an attorney.”

What can you do to win your case?

4. Even before filing a claim, eliminate confusion and ambiguity with precise documentation and photos.

Frank Darras, a consumer attorney in California whose firm specializes in insurance matters, recommends consumers take detailed videos of their homes and possessions every New Year’s Day.

“Go through the house room by room, closet by closest, drawer by drawer with the video camera so you have documentation of what you have and there’s no question about what you’re claiming,” Darras says.

5. Keep backups of all documentation.

“We can’t say it enough: pictures and receipts, pictures and receipts, pictures and receipts,” says Phillip Sanov, head of the Bad Faith Insurance Practice Group at the Texas-based Lanier Law Firm.

“A policyholder needs to show the damages they suffered, the amount of money to which they are entitled under the particular terms of their policy, and the amount the policyholder spends for temporary emergency repairs or to mitigate damages.”

suing your insurance company

Also, if you’re in a car accident, Darras recommends consumers take photos of the crash site before any of the vehicles are moved.

“The biggest point of contention in an auto claim is who was where at the time of a crash,” Darras says. “If the cars are moved, that’s when it becomes a spitting contest.”

6. Tell it like it is.

If a claim is denied or delayed, Hoag says, a consumer should let the carrier know that “you’ve held up your end of the bargain by paying your premiums on time and that their delay in making a timely payment is harming you and your family.” If you’ve been a policyholder for many years, remind the insurance company that you're a premium policyholder and should be treated like one.

7. Don’t write anything in a letter or email that you wouldn’t want the insurance company to show to a jury.

“Be nice, be specific, and don’t talk like a lawyer,” Darras says.

“Juries want a consumer who simply states, ‘I’ve paid my premiums, I’ve documented my claim, I’ve asked for help, and now you’ve chosen to delay or wrongfully deny my claim. It’s hurt me, my family, my ability to pay my bills, and you’re causing serious harm to all of us, which isn’t fair.’ That’s the kind of letter that comes home to a jury of your peers."

8. Keep a detailed timeline to eliminate the "he said, she said" factor.

Maintain a log of your actions by date, and document all calls with the insurance company. Throughout the entire claims process, the insurance company is keeping detailed records of these interactions, so you should, too.

“You have got to keep notes of who you speak to, what you’ve discussed and specific phone numbers,” Hoag says. “Trust me, the insurance company is keeping as detailed a timeline as possible, and your memory is going to be no match for their concurrent notes.”

9. Don’t lose your cool.

Most insurers record their claims calls. So if you curse, call people names or accuse your insurer of being the worst company on the planet, that behavior could come back to haunt you in court.

Acting that way "undermines your credibility and negatively impacts the value of your case,” Darras says. “We all speak differently if we know we’re being recorded, so speak that way when they call you.”

10. Hire an attorney who has a track record with insurance cases and has enough financial ammunition to battle a big-bucks insurance company.

These types of lawsuits aren’t for the faint of heart, and you don’t want your insurer to look at your lawyer and think, “Who’s that guy? There’s no way he can fund a $100,000 piece of litigation.”

“Remember, your carrier is a professional litigant,” Sanov says. “They’ve been coming to your county and using your courts for decades. If your carrier is holding your claim check hostage because your lawyer is a no-name or has no funds or has no reputation, you will get a bargain-basement result.”

Moreover, insurance law is complex, which makes the need for an experienced lawyer all the more pressing.

suing your insurance company

“You want an attorney who is comfortable with insurance policies and has done insurance litigation, because it’s a little less straightforward than you might imagine,” Hoag says. “A good insurance lawyer will know if the company is behaving in a manner that lines up with the industry standard.”

11. Explore pre-lawsuit mediation.

According to Hoag, a good insurance attorney may offer to sit down with your insurance company and its lawyers to hammer out an agreement.

“Take the opportunity if you can, because it could save you tens of thousands of dollars on litigation,” she says. “Also, you’ll get results in a few months rather than a few years.”

12. See whether you live in a state where you might be compensated for such things as punitive damages and emotional distress.

Darras likens this scenario to a bank robber taking money from a vault, returning it 10 years later and expecting to not be arrested.

“He’d still go to prison because he did something wrong, and it’s the same with insurance,” Darras says. “If they’ll delay, delay, delay and then offer you what they should have paid a year or two ago, you might be able to claim extra damages outside the contract.”

13. Once litigation starts, be prepared to go the distance.

Hoag says insurance lawsuits seeking more than $10,000 in damages can last for years. This is particularly true, she says, of claims concerning house fires.

“If the insurance company says, ‘We think it’s arson,’ that will be protracted because you have so many issues to consider -- personal property, the house itself and whether the fire was set intentionally,” she says. “And obviously the insurance company has made a decision, otherwise you wouldn’t be suing. You have an uphill climb trying to get them to change their mind, so get ready for a fight.”

14. Be honest.

Darras says jurors want to sympathize with a plaintiff. This means that if you filed suit too quickly, overestimated your claim or overinflated your damages, “a jury will crush you,” he says.

“Juries want to reward good behavior, and if you’ve followed the rules, they will,” Darras says. “So make sure you are fair and honest and forthright. Juries love that. They hate big power. They hate a corporation who holds consumers hostage. And they hate a carrier who is irresponsible.”

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