How to Sue Your Medical Insurance Company for Bad Faith

How to Sue Your Medical Insurance Company for Bad Faith

You might have grounds to sue your medical insurance company for bad faith if it denies your claim without a justifiable reason or if the insurer did not adequately review your claim. The first thing to do is to review your contract to determine whether the insurer has breached it. Next, compile evidence and documentation of your claim. Also, document all your correspondence with the insurer and its reasons for denying the claim. 

Make a final demand before initiating a lawsuit. Then, submit a complaint to your state insurance department if the insurer fails to pay the claim. An insurance bad faith lawyer can help you prepare for an insurance bad faith claim to improve your odds of receiving reasonable compensation. 

How to Sue Your Medical Insurance Company for Bad Faith

Review the Original Version of Your Insurance Contract 

Start by determining if a breach of your contract has happened before moving forward with a lawsuit. Ask for a complete version of your contract from your medical insurance carrier if you don’t have one. The date on your contract should precede the date you initiated your claim. Carefully examine all the clauses to ensure your policy language covers your claim. 

Compile Evidence and Documentation 

Compiling evidence and documents is crucial in proving insurance bad faith. Assemble all pictures, receipts, medical records, and estimates submitted to your medical insurance company. Be sure to document all your communications with the company. Compile a log outlining emails, phone calls, and in-person sessions with the insurer. Record the date, names of participants, and an overview of the discussion. 

Request A Claim Denial Review

If your insurance company denies your claim, ask a supervisor at the company to reconsider the denial decision. The supervisor might identify a mistake in the claim process and reverse the denial decision. Assemble a log of all your communications with the supervisor and the insurer. Also, document the arguments presented by the insurer to support the denial decision. 

Write a Demand Letter 

You must demonstrate that you took reasonable steps to settle the claim before bringing a lawsuit. This demonstration might involve writing a detailed demand letter and sending it to your medical insurer. Use a return receipt to obtain evidence of mailing the letter. The insurer cannot deny receiving the demand letter when you have proof of mailing. 

Give your insurer up to 60 days to respond to the letter or settle the claim. Follow up with the insurance company to confirm if it received your demand letter. Inform the company that you intend to initiate a bad faith insurance claim if your claim is not settled properly and on time. You can file a lawsuit if the company ignores your demand letter and other attempts to settle your claim.

Work with a Bad Faith Insurance Lawyer to File a Bad Faith Insurance Claim 

Start by consulting with an experienced bad faith insurance lawyer to evaluate your case. Your attorney will be able to guide you through the legal process to improve your chances of recovering full and fair compensation for your medical bills and other losses that occurred because the claim was not paid. Your attorney will also identify which court has jurisdiction over your insurer. It could be a state or federal court. Also, your lawyer will go over your legal options with you and help you decide the best way to proceed. You may be able, for instance, to sue your medical insurance company for negligence, fraud, or breach of contract. 

Your bad faith insurance attorney will file your lawsuit in the appropriate court and attach all the required documents. Once you initiate a lawsuit, the insurer will receive paperwork requiring the company to file a reply and start the process of settling your case.

Insurance companies usually have enough financial resources and a team of experienced defense attorneys to help them reduce their liability for claims. They capitalize on your limited knowledge of insurance laws to devalue your claim and maximize their profits. Retaining a lawyer with excellent success rates in handling bad-faith insurance claims can help level the playing field. 

Your lawyer will have resources and a legal team to bolster your negotiation abilities. The lawyer may, for instance, call expert witnesses to testify in your favor. He or she may also hire a private investigator to assemble the evidence and documentation necessary to help you obtain reasonable compensation from a large and powerful insurance company.

Working with a lawyer gives you the ability to focus on the healing process without worrying about deadlines and mistakes that can compromise your claim. 

Your lawyer can also handle communications and negotiations with your medical insurance company. The lawyer will employ strategies that counter the unscrupulous tactics most insurance companies use to undervalue or deny claims. He or she will continue to negotiate with the insurer to get you fair compensation.

If settlement negotiations are unsuccessful, your lawyer will likely move your case to trial. The lawyer will present evidence and compelling arguments aimed at satisfying the burden of proof to help you achieve a favorable outcome.

What Is Insurance Bad Faith?

Bad faith insurance describes a situation where an insurance company mishandles a claim or exploits a policyholder, failing in the duty to act in good faith and fair dealing. Insurance companies usually act in bad faith to save money and maximize profits. Insurance bad faith could arise at different phases of the insurance process, from selling a policy to the insured to processing a filed claim.

If your medical insurance company is mishandling your claim or has denied your claim, you might wonder, “how do I know if I’m a victim of bad faith insurance?” The following signs may indicate that your insurer is acting in bad faith: 

  • Improper Claim Investigation: Failing to investigate your claim or conducting an incomplete investigation qualifies as a bad faith insurance act. Your insurer may be frustrating you into abandoning the claim if it is neither answering your calls nor interviewing people that might have information about your claim. 
  • Denying Your Claim Without a Valid Reason: Your insurer must provide a justifiable reason for denying your claim. Providing unclear reason or no reason is an act of bad faith insurance. 
  • Devaluing Your Claim: The insurance company may pay less than the actual claim value. 
  • Payment Delays: The insurer may take unreasonably long to pay an already approved claim. Your insurer might sometimes have a genuine reason for the payment delay. Your lawyer can investigate the matter to establish whether the insurer has a valid reason or is just acting in bad faith. 
  • Misrepresenting Insurance Policy Language: Insurance contracts are often long and contain language that can confuse someone with little or no knowledge of insurance law. An insurance company can take advantage of your limited knowledge of your policy and misinterpret some clauses to avoid settling your claim. 
  • Unreasonable Requests for Information: An insurer requesting unnecessary information may be trying to find a reason to deny your claim. It could also be an attempt to frustrate you into giving up the claim. 

What Damages Are Available for Bad Faith Insurance?

Recoverable damages in a bad faith insurance claim in Nevada fall into two broad categories: economic and non-economic damages. Punitive damages may also be recoverable in some cases. 

Economic Damages 

These damages cover the direct monetary losses you incurred because of your insurer’s bad faith act. They include the value of the denied claim, lost wages incurred if your exacerbating health prevented you from working, and lawyer’s fees for seeking compensation through a bad faith lawsuit. 

Non-Economic Damages 

This category compensates you for subjective, non-financial losses suffered due to your insurance company’s bad faith conduct. They include pain and suffering and emotional trauma. 

Punitive damages 

Punitive damages may be available in some bad-faith insurance cases. These damages seek to punish the insurer for its particularly wrongful conduct and discourage others from engaging in similar conduct in the future. 

You may receive punitive damages if the judge or jury rules that the insurer’s wrongful conduct was deliberate. For example, if the insurer deliberately fails to pay or investigate your claim, the judge or jury may see fit to award punitive damages.

Be sure to seek legal representation from an experienced lawyer to sue your medical insurance company to improve your chances of recovering the full extent of your damages. Your lawyer will help you determine recoverable damages in your claim and available options for recovering those damages.