ERNST & YOUNG
Lawsuits often arise when a large insurance company fails to protect or indemnify insured persons from covered acts under their policy. They also occur when insurers don’t realize their end of the contract, for instance, by wrongfully denying insurance claims.
Insurance claims cover everything from routine and comprehensive medical exams to death benefits. In some cases, the patient-victim may not be capable of filing a claim, let alone speak to an attorney; so, a third-party may file on their behalf. However, only the people listed on the policy are entitled to claim payments.
Hence, you can sue an insurance company on behalf of a loved one if you feel the former failed or violated the terms of a policy. Thankfully the Law in Maryland protects policyholders against predatory and unscrupulous insurance companies’ tactics.
Some common violations by insurance companies include failure to pay claims on time, making bad faith claims, and refusal to pay correctly filed claims. This article looks at what to expect when suing a large insurance company to help you determine whether or not it’s worth the trouble. But first, let’s look at some valid reasons why insurers deny claims and situations when you can file a lawsuit.
Reasons Why Insurance Companies Deny Claims
Insurance companies have an arsenal of reasons for denying claims, some legitimate, some not. Some common ones include:
- Lack of coverage
- Application errors
- Claim errors such as the time requirement of notification
- Insurance fraud
- Bad faith denial
When Can You Sue a Large Insurance Company?
Insurance companies must act in good faith, avoid unfair trade practices, and abide by the policy terms. These obligations require insurers to refrain from:
- Inadequate and delayed investigation of a claim
- Refusing to pay claims where liability is reasonably clear
- Denying claims with little, unclear, or no explanation as to why
- Failing to approve or deny claims within the specified or a reasonable timeframe
- Rejecting claims based on application misstatements after the contestability period has passed.
If you believe that an insurance company improperly denied your loved one’s claim, and they don’t seem to budge from their decision even after appealing it, you can start looking into suing them.
However, before filing a lawsuit, it’s best to consult a medical malpractice or negligence attorney first. Sometimes the presence of a qualified and experienced professional can persuade the insurer to change their earlier position, honor its obligations, or agree to a fair settlement.
If you have little evidence to support your claim or justify your lawsuit, you may have a hard time getting an attorney to agree to a contingent fee arrangement, let alone force an insurer to honor the claim. Therefore, it’s best to keep detailed records. Remember to:
- Document any correspondence with the insurer or its representatives. Keep copies of written communication and take note of any phone or in-person conversations.
- Keep track of all related expenses such as your loved one’s medical bills, lost wages, or attorney’s fees.
- Once you decide to take legal action, do not contact or sign anything from your insurer without legal counsel first.
- Choose an attorney or law firm with extensive experience in litigating against insurance firms.
What to Expect When Suing an Insurance Company
A lawsuit can be a complicated legal process, so it requires legal experts. Your goal should be to hire a qualified attorney or law firm with experience in litigating insurance claims and suing insurers. Expect the following:
- One or more investigations done by both your attorney and the insurer
- To spend money on court costs, discovery, experts, and travel
- A deposition where you or your loved one must answer questions truthfully
- Failure to settle will see your case going to trial
- You may testify in court as a witness
- Lawsuit pendency, which requires patience
- To trust your attorney to represent your interests throughout the process, so to select one wisely
- You may most likely participate in settlement or mediation discussions
- To make decisions throughout the process and weigh settlement offers
The Pros of Suing an Insurance Company
If you are lucky, your loved one’s case looks strong because:
- There is ample evidence of negligence, which caused harm or injury
- There are assets available for making payments
- You have an experienced medical malpractice attorney assisting you
Despite this, you still need to consider the other pros and cons related to your case for both you and your loved one before filing a lawsuit.
The benefits of filing a lawsuit against an insurance firm extend to more than personal gain and compensation to include social good.
The personal benefits of filing may be obvious:
- A successful case outcome provides you with the money you need to care for your loved one, meet their current and future health care needs, and pay your debts. You may also cover your legal expenses, especially if the ruling requires the defendant to foot the bill.
- You may also get a sense of justice from the legal system, which may alleviate some of the pain and suffering you and your loved one felt for the medical negligence, malpractice, or wrongdoing.
- Sometimes giving up because the legal process seems daunting and you lack the finances and willpower to see it through may leave you feeling discouraged, depressed (as a primary caretaker), and may impair the recovery of your loved one. Inaction may hurt more or feel like a betrayal.
The social benefits of medical malpractice or negligence lawsuits include:
- Insurance companies will be less likely to wrongfully deny paying claims in favor of profits and their bottom line after suffering reputational and punitive damages.
- Claims force health care providers (both professionals and institutions) to maintain acceptable standards of care. If medical professionals fear the repercussions of negligence and malpractices, and facilities fear the reputation damage attached to a lawsuit, they are more likely to implement safe practices.
The Cons of Suing an Insurance Company
The drawbacks of lawsuits may not be immediately apparent, especially if you have a strong case. They include:
- Litigations can sometimes take years to resolve. Unfortunately, it’s becoming increasingly difficult to convince large insurance companies to settle claims on reasonable terms instead of going to court. Many insurers prefer to drag on cases because they can afford to since they have a team of attorneys on retainer.
- During the period of your pending case, you and your loved one will frequently relive the accident when giving testimony in court and depositions, or during the investigation process.
- If the case goes to court, the defense attorneys will dig into your loved one’s past for medical and counseling records. They will also go out of their way to attack your credibility. They will repeatedly try to turn mistakes and imprecisions in your reports into evidence of alleged dishonesty.
- A lawsuit that drags on for years could take a toll on your family, friendships, social life, and ability to offer your affected loved one the care they need.
- The pendency of lawsuits is often counterproductive to recovery since its dependent on a positive attitude, grit, and a focus on ability rather than disability.
Don’t Go Up Against a Large Insurance Company Alone
If you want to sue an insurer on behalf of your loved one or friend, do not do it alone. Hire an attorney or law firm with the right qualifications and experience in suing large insurance companies.
Weltchek, Mallahan & Weltchek, LLC, is a top Maryland civil litigation firm with premier medical malpractice and personal injury attorneys. Contact us today for your confidential and free case consultation.
Who Can You Trust with Your Case?
Have you or a loved one been injured due to negligence? We want to help. Don’t hesitate to contact us if you believe you have a case; time is an important factor. Interested in learning more? Get in touch with us so we can better evaluate and serve your needs in getting the justice your loved one deserves. You may very well be entitled to compensation.
Call For a Free Consultation