Under What Circumstances Can You File a Lawsuit Against the Insurance Company

Under What Circumstances Can You File a Lawsuit Against the Insurance Company?

Have you ever found yourself frustrated with your insurance company? Maybe they denied your claim, delayed payment, or offered less than you expected. You may wonder if you can take legal action against them.

It’s possible to file a lawsuit against your insurance company under certain circumstances with the assistance of the diminished value lawyers at Buckhead Law.

In this article, we will reveal all the circumstances under which you should file a lawsuit against your insurance company.

Understanding Your Rights

As a policyholder, it’s crucial to understand your rights. Insurance companies are legally bound to act in good faith. This means they must investigate claims promptly, evaluate them fairly, and provide reasonable compensation when possible.

Let’s shed light on the circumstances under which you can file a lawsuit against the insurance company.

Circumstances Under Which You Can File a Lawsuit Against Your Insurance Company

Breach of Contract

If the insurance company fails to fulfill the terms of your policy, such as denying a valid claim or refusing to cover damages, they may seek to breach the contract. You have the right to file a lawsuit.

Bad Faith Practices

It’s a requirement for insurance companies to demonstrate an act of good faith when handling claims. Any action that demonstrates dishonesty, deception, or unfair dealing may constitute bad faith.

This includes unreasonably delaying payments, offering less than the value of your claim, or denying coverage. In such instances, you should take legal action against the insurance company.


You can also file a lawsuit against your insurance company if a misinterpretation of facts or terms of the policy led to the denial of the claim. This could include misleading information provided during the policy sale or false promises regarding coverage.

Violation of State laws

Each state has its own regulations governing insurance companies. If the insurance company violates the laws, such as by engaging in unfair claim practices or deceptive advertising, you may be able to pursue legal action.


You can also take legal action against the insurance company for their negligence. If the insurance company’s negligence causes harm, such as failing to process your claim on time, resulting in additional damage, you may have a negligence case.

What steps should you take when you want to sue the insurance company? A deeper dive below will unfold everything.

Steps to Take Before Filing a Claim

Document Everything

Keep detailed records of all communications with the insurance company, including emails, letters, and phone calls. Furthermore, document any damages, expenses, or losses related to the claim.

Seeking Legal Advice

Consult an attorney who specializes in insurance law. Insurance attorneys will assess your situation and guide you through the legal process.

Filing a Complaint

Before filing a lawsuit, consider issuing a complaint with your state’s insurance regulatory agency. This could prompt the insurance company to reevaluate your claim and may lead to a resolution without litigation.

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What to Expect After Filing the Lawsuit

 You should expect the following:

  • Response from the insurance company: After receiving the complaint, the insurance company has a specified period to respond. They may file an answer to the complaint in which they present each allegation.
  • Discovery: Here, you’ll have to exchange information and pieces of evidence relevant to the case with the insurance company.
  • Depositions: Deposition includes sworn testimonies from witnesses, including you and the representatives from the insurance company. Your attorney will question these individuals, and the insurance company attorney will have the opportunity to cross-examine them.
  • Mediation or settlement negotiation: There will be opportunities for mediation before going to trial. A third party is involved here to reach resolutions.
  • Trial: If mediation fails, you should expect the case to proceed to trial. During the trial, both you and the insurance company will have to present arguments.
  • Verdict: The jury will reach a verdict after considering all the evidence and arguments. If the jury favors you, the court will order the insurance company to pay for the damages or take specific action.
  • Appeals: There may be an appeal based on the decision made.

Summing Up!

In conclusion, filing a lawsuit against your insurance company is not something to be taken lightly. There are circumstances where it may be necessary to protect your rights and seek the compensation you deserve. That’s why having a clear understanding of them is of great importance.