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Can I Sue My Auto Insurance Company?

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You count on your car insurance company to hopefully offer a smooth claims process and to cover damages after an accident. If your provider denies your claim or gives a ridiculously low payout, you may wonder whether you can sue your auto insurance company.

While you can sue your auto insurance company, it’s only worth it in certain situations. Make sure to consult a lawyer before starting a suit to confirm whether you have a viable case or not.

If you’re looking to change providers, we’ve reviewed the best auto insurance providers to find out which are both trustworthy and affordable. Get free quotes from various auto coverage options to determine the insurers that will keep you safe down the road.

Can I Sue My Auto Insurance Company for Denying a Claim?

Yes, you can sue your auto insurance company if a claim gets denied after an accident, but only under certain circumstances. Below are a few valid reasons to sue a car insurance provider:

  • Extremely delayed claim payout
  • Inadequate or drawn-out claim investigations
  • The denial of a properly filed claim
  • The payout was less than originally agreed upon
  • The denial of a claim in bad faith
  • If a claim is denied without explanation

It’s extremely common for policyholders to sue auto insurance companies, but these drivers don’t always win their lawsuits. Providers reserve the right to deny some insurance claims, so carefully read your contract and all exceptions and disclaimers outlined in it. You won’t win a suit against your auto insurance company if it denies a claim in good faith and without a breach of contract.

You’ll likely want to set up a free consultation with a personal injury attorney before deciding to sue your auto insurance company. This free case evaluation will let you know whether it’s worth going through the insurance litigation process with your own insurance provider.

Understand What Types of Coverage You Have

Insurance isn’t always a simple subject to figure out, but it’s one that you’ll need to consider if you plan to sue your auto insurance company. Know that your personal medical bills won’t be covered if you only had liability insurance on your motor vehicle, as that cheap car insurance type just covers others after you cause an accident.

Also know that you’ll need uninsured motorist coverage or underinsured motorist coverage to receive payouts after getting hit by one of these drivers. You can sue the individual driver for medical expenses or property damages, but suing an insurance provider won’t work.

Alternatives to Suing Your Auto Insurance Company

Unless a driver has an almost indisputable case against their car insurance provider, they often have a hard time winning in court. That’s because most insurers work with experienced lawyers who may be difficult to stand up against in a lawsuit.

You can sue your auto insurance company, but it’s likely to be a long and expensive process. Between the elevated costs, added stress and lack of a guarantee that you’ll win, heading to court may not be your best move after a claim is denied.

Below are a few ways to settle your claim before suing your auto insurance company. Proceed down the list only if the prior strategies don’t solve the problem:

  • Carefully read over your claim: Make sure that your claim is accurate and that you’re not overlooking the reason your claim was denied after an accident.
  • File an appeal for your claim: To dispute your claim with an auto insurer, you’ll need to give details about the claim along with any documentation from the car accident. This includes images of the damage, police reports, receipts for bills you’ve paid for and any communication you’ve sent to or received from the insurer.
  • Go to claim mediation: If you head to mediation, a neutral third party will listen to both sides and attempt to provide an amicable solution for each. While you may not receive as significant a payout as in court, it’s usually best to take what you can get in mediation to avoid the time, hassle and potential expenses associated with a lawsuit.
  • If all else fails, you can head to court: Don’t sue your auto insurance company without considering the time, effort and expenses you’ll have to deal with. It could take years to move your case through the legal system, and you could face lawyers with experience in fighting off lawsuits. The potential payouts are huge, but it could cost you in the end.

One other option is to file a complaint with the department of insurance in your state. While you won’t have to head to court, the most likely outcome is that the department will deem the insurer’s denial valid and will order you to drop your potential lawsuit.

Should I Consider Trying Out Small Claims Court?

It will be a much less prolonged process if you head to small claims court to address your personal injury or property damage claim. The at-fault party will be determined much quicker by taking your accident claim to this type of court because the maximum payouts are far smaller.

Small claims courts have maximum payouts that vary depending on state insurance laws. Accident lawyers can sue for up to $20,000 in damages in Texas, while the maximum payout is only $2,500 in Kentucky and Rhode Island. Maximums range across the remaining states, with California law allowing up to $10,000, Florida up to $8,000 and New York usually up to $5,000.

Why Do Auto Insurance Companies Deny Claims?

Your car insurance company may offer a range of reasons for denying your claim. Some of the most common ones are listed below:

  • Lack of relevant insurance coverage
  • Application and claim errors
  • Auto insurance fraud
  • Bad faith denial

Claim errors are very common and important to keep in mind. One common example is not notifying your insurer in time, which in some cases is as short as 24 hours.

Insurance companies won’t explicitly give bad faith denial, but they often use legal language and fine print to deny your claim. Since providers lose money when they pay out claims, they often attempt to deny as many car insurance claims as possible. Those who prove that their insurer gave a bad faith denial may be able to sue for punitive damages under the tort system.

If you’ve got a strong argument for your claim, then you can sue your auto insurance company. Make sure to hire a reputable law firm, even if it has higher attorney’s fees, and prepare for what could end up being a drawn-out process to receive a fair settlement.

Our Recommendations for Auto Insurance

If you plan to sue your auto insurance company, you’ll likely be in the market for a new one. We recommend considering GEICO, Progressive and State Farm as potential replacements to get multiple car insurance quotes from. While no car insurer is guaranteed to pay out for claims, these companies are known as legitimate providers and are backed by strong financial health.

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GEICO: Best Overall

GEICO is our choice for the Best Overall coverage due to its excellent industry reputation and A++ financial strength rating from AM Best. The company typically has competitive premiums and offers discounts for your car having safety and security equipment, for being a good student or for being a responsible driver.

Progressive: Best for High-Risk Drivers

If you’ve been in a recent auto accident or received a speeding ticket or DUI violation, it may be smart to consider Progressive. The provider is known for accepting high-risk drivers who may be rejected by other leading auto insurers. Read our Progressive insurance review to find out more about working with the company.

State Farm: Best Student Discounts

With local insurance agents spread across the country, State Farm is generally known as an accessible company despite its large size. Drivers benefit from its wide range of discounts, especially those intended for students, along with its A++ financial strength score from AM Best.

Frequently Asked Questions (FAQs)

How to sue an insurance company without a lawyer?

It’s far easier to sue an insurance company with a lawyer. You can do it yourself, though, by talking to the insurance adjuster, carefully studying your auto insurance policy and sending a letter to your insurance provider. Know beforehand that the process may be longer and more expensive than you’d imagine at first.

Can I sue my car insurance company for taking too long?

Yes, you can sue your automobile insurance company if it takes too long to address your claims. You could do this if the length of the delay was “unreasonable.”

Can I sue my insurance company for emotional distress?

Yes, you can sue your auto insurance company for emotional distress. Keep in mind that you and your lawyer will have to prove that you suffered emotional distress due to the actions or negligence of the car insurance company.

Can I sue my insurance company if I was at fault?

It’s possible to sue your insurance company even if you were the at-fault driver, but this can be tricky. It’s unlikely that you can win your case if the insurer denied your claim when you were clearly at fault. If your insurance company decides you were at fault and third parties agree, you will not win a suit claiming you weren’t responsible.

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  1. I put in a claim october of two thousand twenty two and still have not been paid out

  2. My insurance company is giving me FAULTY info there telling me my market value is really low $9,000 to $14,700 I been to dealerships and trucks that are not even as nice as my truck a year older than my truck and There asking $20,000 to $35,500. The adjuster told me my truck would be considered a total loss if repairs went over $5,800. He did not even know my truck was diesel.This is after he gave me the estimate for repairing the Rodent damage. It’s been over 4 weeks since I put in a supplemental. I’m still waiting for answers. How can a truck that’s worth over $20,000 be totaled at $5,800. I’m being railroaded.

    1. Yes I just went through the same thing with my insurance company they totalled my truck for frame damage but just the tow hook was bent. I looked at the action they are partners with the are auction it off with just front end damage no frame damage and non salvage title. Fight them. I’m in contact with my agent to put hold on the auction till we have the case built against the insurance company running scams

  3. My car and hundreds of others were destroyed in a flood on Sept 2,2022. My insurance said I had a 38.00 fixable problem. Then six weeks later they send it to another shop and pay them 6,900 for a transmission they ordered from Germany! Seven months later it still don’t work with that new transmission! The bank took the car to their mechanics! I’ve been 8 months without a car,the bank is ruining my credit saying I owe I owe,for a ruined car! I believe if mendota had just called the car totaled in the first place,none of this would be happening! I’m waiting to see what the banks mechanic says about the car. Y’all think I should sue mendota insurance company???

  4. Where do I find a third party mediator to discuss if they think I have a valid dispute against progressive.

  5. Geico, your top choice contributed to my “being fixed” car being off the road for a FULL YEAR. It ended up in three auto repair shops. The actual repairing took close to four months. THAT means my car was off the road, due to Geico’s negligence, laziness and deliberate, unfounded delays (where it would sit in a lot for MONTHS before being towed to the next shop). Additionally, after the first shop (to which they paid $4,000 — IN ADVANCE — and without, as is law — INCLUDING MY NAME ON THE CHECK — only to have the car come out in worse shape than when it went in — &4,000 WASTED — I mean, it took them THREE MONTHS to get the car RE-INSPECTED after the disastrous work of the first shop necessitated MUCH more work (it was undrivable). THREE MONTHS just for some Geico-ite to TAKE A LOOK AT IT! It took an ADDITIONAL two months for them to even GET it to the second shop! That’s FIVE MONTHS BETWEEN SHOPS! All told, they contributed, through their lax, negligent, idiocy, EIGHT MONTHS out of the total TWELVE MONTHS my car was off the road. EIGHT MONTHS! I want to SUE Geico, but for WHAT? Negligence? The THOUSANDS OF DOLLARS I had to pay on rental cars Ubers? EMOTIONAL DISTRESS?

  6. I’m looking for help with recovering my lost wages and diminished value and daily loss of use of vehicle from Texas farm bureau

  7. I need to sue my auto insurance company they put me through so much stress about my residency in Washington DC I send them proof address bank statement phone bill light bill gas bill they charge my policy with my Knowledge they say I move to new jersey.. in they did investigate on me I never live in New Jersey.. I know when you move you suppose tell your insurance company .. I never did that..ok i told them I work for avisbudget car rental I drive state to state on they told me I couldn’t leave dc.i said wht or you seriously.. I have kids in nyc go see them in school is about to start ok .they want to pay $6000 a yr .I say no way .. am stress they Harassment pain in Suffering Discriminate

  8. What if the insurance company doesn’t want to remove at fault to a no fault from DMV after you have gotten a deductible back,as well as other accident that we’re not my fault even according to the police report and then turned around and dropped me?