You were injured in a car accident, and your insurance company won’t pay. So, can you sue your own insurance company? Here’s what you need to know.
When you are involved in a car accident, recovering your losses often involves filing a claim with your auto insurance company. But, as with many aspects of your recover, this is often easier said than done. Despite your best efforts, your insurance company still might not pay. In this scenario, you will be left wondering, “Can you sue your own insurance company?”
In many states, drivers are required (or have the option) to purchase “no fault” car insurance. This is supposed to provide coverage for the policyholder without regard to who was at fault in a collision. Comprehensive auto insurance covers the policyholder as well; and, if you have uninsured/underinsured motorist (UIM) coverage, then you can seek additional compensation when another driver is to blame for your injuries.
In other words, there are lots of circumstances in which you can be entitled to compensation from your own insurance company after a car accident. So, what happens when your insurance company won’t pay?
When Can You Sue Your Own Insurance Company?
The short answer to the question, “Can you sue your own insurance company?” is, “Yes.” Legally speaking, there is nothing that prevents you from suing your auto insurance company—at least eventually.
But, there are a couple of things you need to know:
- First, your insurance policy is a contract, and this means that both you and your insurance company have a legal obligation to comply with the terms of your policy in good faith. For you, this means filing your claim on time, responding to all appropriate requests for information, and considering reasonable settlement offers. In order to have standing to file a lawsuit, you first need to do your part to try to reach a good-faith settlement.
- Second, before you file a lawsuit, you might be required to try mediation or arbitration. Depending on the state in which you live and the terms of your policy, you may have already agreed to try mediation or arbitration before filing a lawsuit. Mediation is essentially a structured negotiation process that involves getting input from a neutral third party (the “mediator”), while arbitration results in a binding decision (which you or your auto insurance company may be able to challenge in court).
If you are not required to mediate or go to arbitration (or if mediation or arbitration fails), and if you try to resolve your auto insurance claim in good faith, then you can sue your own insurance company. Of course, this is also easier said than done, and you will need to be sure to work with an experienced attorney.
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Will You Have to Sue Your Own Insurance Company If It Won’t Pay?
While some people get fed up and ask, “Can you sue your own insurance company?” because they want to sue, other people simply want the process to be over as quickly as possible. So, if your insurance company won’t pay, does this mean that you have to sue in order to recover just compensation?
Not necessarily. If you have been unsuccessful in trying to handle your insurance claim on your own, now is the time to hire an attorney to represent you. Even though you have been unsuccessful to date, an attorney may be able to turn things around.
How? First, your attorney can review what has happened with your claim to date and determine why your insurance company won’t pay. If your adjuster is waiting on information from you (whether you know it or not), your attorney can figure this out—and possibly get your claim moving forward. If it appears that your insurance company is dragging its heels or refusing to pay in bad faith, your attorney can deal with this in ways that you would not be able to deal with it on your own.
Depending on the circumstances, your attorney may be able to get your claim on track for settlement, or your attorney may need to take your claim to court (or mediation or arbitration). The only way to figure out what is necessary is to get a free claim assessment—which you can do 24/7 through CarAccidentSource.com.
When Is It Time to Think about Suing Your Auto Insurance Company?
In addition to asking, “Can you sue your own insurance company after a car accident?” it is also important to ask, “When should you think about filing a lawsuit?” Here too, the answer depends on the circumstances at hand.
While you do not want to file a lawsuit prematurely (because this will only lead to unnecessary costs and delays), you also do not want to wait too long. The longer you wait to assert your legal rights, the more defenses your insurance company may have available. Additionally, all 50 states have statutes of limitations for car accident claims; and, if you let the statute of limitations expire, you won’t be able to recover any compensation for your car accident.
Again, the best thing you can do is discuss your situation with a local lawyer who handles auto insurance claims. Your lawyer can tell you if it is time to think about filing a lawsuit, if you will need to file for mediation or arbitration first, or if it might still be possible to settle. If you have been struggling with your insurance company, at this point you need to be careful to protect your claim, and you should consult with a lawyer to make sure you don’t jeopardize your financial recovery.
What are the Steps Involved in Suing Your Own Insurance Company?
Let’s say you talk with a lawyer, and your lawyer says it is time to sue. What are the steps involved in suing your auto insurance company?
- First, your lawyer will need to prepare a complaint. This is the formal legal document that is used to initiate a lawsuit. Your lawyer will also need to prepare a summons, and then your lawyer will need to serve the complaint and summons on your insurance company—in addition to filing them in the appropriate court.
- Next, your lawyer and your insurance company’s defense lawyers will engage in various pre-trial practices. This will involve filing motions with the court, taking discovery, and preparing evidence for trial. Importantly, during this pre-trial phase, settlement negotiations will most likely continue, and it is entirely possible that your claim could still settle prior to trial.
- Finally, if your claim doesn’t settle, then trial is the next and final step—pending any appeals. Your lawyer will present your claim, the insurance company’s lawyers will defend against it, and then the judge or jury will decide if you are entitled to financial compensation.
Can (and Should) You Hire a Lawyer to Sue Your Insurance Company?
This is an extremely abbreviated summary of the litigation process. There are several complex steps involved, and suing an insurance company successfully requires the knowledge and skill that come with years (if not decades) of relevant legal experience. As a result, while you can technically sue your insurance company on your own, practically speaking, your only real option is to hire an attorney.
In terms of costs and legal fees, your attorney will represent you on a contingency fee basis. This means that you will not have to pay anything out of pocket, and your attorney will only collect a fee if you win. Since there is more work involved in going to trial, your attorney may charge a higher percentage if your claim doesn’t settle during the pre-trial phase. Even so, an attorney can still help you collect more than you could recover on your own—especially if you haven’t been getting anywhere with your claim.
RECAP: Can You Sue Your Own Insurance Company?
So, that’s a lot of information. With all of this in mind, let’s get back to our original question: “Can you sue your own insurance company after a car accident?” Here are the highlights of what you need to know:
- Yes, you can sue your own insurance company after a car accident. But, you must deal with your insurance company in good faith first.
- You may be required to go to mediation or arbitration before suing. This depends on the terms of your auto insurance policy and the state in which you live.
- Even if your claim is going nowhere, a lawyer may be able to help you obtain a settlement. Your lawyer can evaluate your claim and determine why you aren’t receiving payment.
- Filing a lawsuit doesn’t necessarily mean going to trial. In many cases, auto insurance claims will settle after a lawsuit is filed.
- You will need to hire a lawyer to help you. While you can technically file a lawsuit against your insurance company on your own, you will need to hire a lawyer if you want to have any chance of winning.