Understanding how a lawyer can help solve an insurance dispute is beneficial in helping you recover the benefits you need and deserve. Sometimes, insurance companies appear to be purposefully dragging out the claims process or oddly unwilling to agree with you. Attorneys who specialize in insurance often make these processes more efficient. They are also useful in complicated claims, cases of unclear fault, and situations where you suffered huge losses.
How a Lawyer Can Help Solve an Insurance Dispute
Some of the leading reasons people hire lawyers for insurance disputes to have to do with case complexity and the potential amount of compensation they would receive. It is possible to settle with an insurance company on your own, but you may improve the chances of success and a higher settlement offer when you have a lawyer’s advocacy.
Many attorneys offer free consultations with no obligation to hire them. You can meet with lawyers about your claim and gather opinions and information before you talk further with anyone at the insurance company.
Many insurance disputes are very complex and require massive amounts of paperwork, expert consultation, research, and drafting. Cases that laypeople handle themselves typically lead to tremendous time investment and wading through legal jargon and technicalities. Not only is the chance for making mistakes relatively high, but that could be the time you might prefer to spend at work bringing in an income or being with your family rather than researching the ins and outs of the law. Couple that with the reality of a potentially huge settlement amount, and hiring a lawyer makes sense.
Lawyers value their time, too. They do not accept cases they believe are not worth their time, particularly if they work under contingency fee arrangements. In these situations, lawyers get a percentage of a settlement or trial win and do not require clients to pay upfront like they would with hourly fees and retainers.
Unclear fault is another reason people hire lawyers for insurance disputes. Lawyers have the resources, experience, and contacts to research cases and determine who is at fault and who you should sue. Lawyers can help solve an insurance disagreement in many other situations, too. For example:
- Payment delays such as if the insurance company seems to unreasonably be delaying payouts, you need to take care of your health, water damage, a hole in the roof, or property lost to theft.
- Fraud, such as when the insurance company gives inaccurate reasons for denying your claim or offers less money than it knows you are entitled to. Offering less violates federal and state laws.
- Unexpected policy cutoff, such as when your policy is terminated without any notice and/or without explanation. Unexpected termination sometimes happens after policyholders file claims, especially large claims. This is a situation in which you are better off contacting a lawyer right away rather than trying to resolve the dispute directly with the insurance company.
- The insurer wants you to talk with its attorney. This is one tactic insurer use to get you speaking on the record to perhaps invalidate your claim or even incriminate yourself. The insurance company can use what you say later in a countersuit if you sue. It is best for you to consult a lawyer before communicating with the insurance company’s attorneys.
When Should You Contact a Lawyer About an Insurance Claim?
When an insurance company denies or delays your claim is a good time to contact a lawyer if you have tried repeatedly to find a resolution. Unexpected termination is another smart time to contact a lawyer, too, as is the insurance company saying it wants you to discuss the claim with its attorney.
Bad faith insurance lawyers specialize in insurance disputes and should be able to help you more than family lawyers or those who mostly handle wills and probate cases. Get in touch with attorneys rather than reopening conversations with the insurance company. Lawyers will know how to best proceed.
Do contact lawyers as quickly as possible. As touched on earlier, most offer free consultations with no obligations required on your side to hire them. You have nothing to lose by moving quickly and contacting lawyers. On the other hand, if you wait, you risk running afoul of deadlines and other technicalities. You also delay the resolution of your claim.
Many homeowners enlist lawyers for dispute homeowner insurance claim decisions after exhausting other avenues. In Nevada, about one in 15 homeowners file theft and property damage insurance claims that end up denied or underpaid.
Homeowner insurance policies have appraisal clauses that explain the process when policyholders and insurers do not see eye-to-eye on the dollar value of a claim. Both appoint an independent appraiser and then the two appraisers pick a third. The claim is decided for the amount that two of the three appraisers agree on. However, homeowners must pay for their independent appraiser and half of the cost of the third appraiser. That deters many from enacting the appraisal clause. Insurance companies hope that by denying a claim, homeowners will just give up.
The state insurance commissioner oversees fair pricing and practices in the insurance industry. Homeowners who feel they are being treated unfairly can contact the commissioner’s office to request an investigation or evaluation of the denial or settlement. The office may not be able to reach an agreement with the insurance company, though, in which case homeowners may decide to get an insurance claim lawyer.
Can a Lawyer Help After Your Claim is Denied?
Often, a lawyer can help after an insurance company denies your claim. For example, lawyers know how to file a bad faith insurance claim. They are well-versed in processes such as gathering evidence and documents, reviewing contract terms, documenting the denial of a claim, and determining where to file a lawsuit.
It does take a while to file a bad faith claim in Nevada. For instance, you (or your lawyer) must first appeal the claim denial. If the insurer does not budge, you can submit a demand letter to the company. A demand letter basically is a request for money rightfully owed to you related to a personal injury, property damage, or other types of insurance claim.
Demand letters set out time limits, typically 15 to 60 days, for the insurer to respond. Lawyers are good people to draft demand letters for you. When insurance companies reply negatively or not at all to demand letters, you can file a complaint with the Nevada Division of Insurance. (The division addresses complaints relating to improper denials, improper delays, illegal cancellations or non-renewals, issues with premiums and rates, controversies about the medical necessity of a treatment, theft of premiums, and alleged agent or broker misconduct, among other issues.)
At this point, if the insurance company is still refusing to do its duty, you can file a bad faith lawsuit. Winning means you recover the insurance benefits you were entitled to originally, plus compensation for the losses and damages you have suffered.
Some plaintiffs receive punitive damages if the insurance company’s behavior has been especially egregious. Punitive damages are designed to discourage other companies and people from behaving similarly.
4 Steps When Filing a Bad Faith Insurance Claim
It is extremely difficult for many people to file bad faith insurance claims themselves and succeed without legal assistance. The steps below outline the filing process and clarify why filing solo is tricky.
1. Scour the Full Insurance Contract to Ensure an Understanding of the Possible Reasons for Denied Claims
Claimants (and/or their lawyers) review the insurance contract to clarify what is and is not covered and to pinpoint the possible reasons for claim denial. It is essential to read a version of the contract before a claim is filed because insurance companies sometimes modify contracts afterward in hopes of dodging their obligations. This step is a way of making sure the language in the contract does, in fact, mean the insurance losses suffered should be covered.
2. Collect Evidence and Documentation
Claimants (and/or their lawyers) gather insurance communications, claim denial letters and feedback, copies of medical records or relevant records, and more. The information should include details on insurer phone calls and meetings, including dates, times, participant names, and the issues that were discussed. Showing the chain of communication establishes that claimants did try all the avenues they could to resolve the dispute.
3. Show the Claim Denial, Appeal, and Send the Demand Letter
Some insurers may modify or falsify their versions of a claim denial to make it appear more grounded or reasonable. Claimants ideally would have their own versions of documents. Showing that the versions are different is an excellent way to indicate bad faith.
Appealing is an important step in the process. You ask the insurance company to conduct an internal review about the legitimacy of a claim. Insurers are required to include appeal information on their claims denials. When an appeal fails, another appeal to the state insurance regulatory agency follows. In some cases, the insurance company discovers it made a mistake, and nothing escalates.
A demand letter is necessary if the insurer does not change its mind. The letter details all the why’s, when’s, and how’s of the claim: the details of the accident or loss, information on the claim denial, and evidence supporting the approval of the claim. It is appropriate to give the insurer a limit of 15 to 60 days to respond with claim payment. The letter also explains your intention to file a lawsuit if necessary.
4. File the Lawsuit and/or File a Complaint with the Nevada Department of Insurance
Claimants can file bad faith claim lawsuits only after the allotted time in the demand letter lapses. Lawsuits can be filed for denied, underpaid, or deliberately delayed claims. You can also file related to unexpectedly terminated policies.
At the same time you file a lawsuit, you can lodge a complaint with the state department of insurance. You can lodge the state complaint first if you want to try to resolve the issue through mediation. Filing both a lawsuit and complaint at the same time makes it unlikely the insurance company agrees to mediation.
A bad faith insurance claim lawsuit can proceed only after you show meaningful effort using all available avenues to resolve the claim. Your lawyer can help you determine where to file, for example, in state or federal court. The forum you choose must have authority over the insurer.
An Insurance Dispute Attorney Can Help Your Claim Succeed
The details involved in filing a bad faith insurance claim can be overwhelming for a layperson to do alone. Add to that the fact that you are likely juggling the reasons you filed the insurance claim in the first place, work, family, and the other tasks of life. It is a lot to deal with.
Meanwhile, lawyers have the background and knowledge to maximize the efficiency of your lawsuit and the chances of its success. Attorneys help prove that insurance companies turned down claims for reasons that were not legitimate. They may find examples of times when the insurance company deviated from typical review and investigatory standards. They make sure you have pursued all the avenues you need to before filing a lawsuit.
Legal representatives have experience in the usual insurer tactics for justifying claim denials and can help you collect damages to cover lost income, attorney fees, emotional distress, and many other things. Punitive damages could be possible if the insurer’s behavior was especially terrible or negligent. These damages discourage the insurance company and others from similar actions in the future. Lawyers can help you get higher settlement amounts than you would otherwise, even after their fees are taken out of the settlement. That is a primary way how a lawyer can help solve an insurance dispute.