Can I Sue My Insurance Company?

Last Updated on October 10, 2023

You may or may not be able to sue your insurance company.

After an accident, for example, you may only be able to sue the at-fault driver – not your insurance company. In some cases, however, you can sue your insurance company for emotional distress, medical bills, car repair costs, and other damages.

Keep reading to find out everything you need to know about whether or not you can sue your insurance company.

Key Takeaways:

  1. The ability to sue your insurance company varies based on the situation and state laws, with some states restricting lawsuits against insurers in favor of suing the at-fault driver.
  2. Insurance companies have the right to deny claims, and a lawsuit may not be successful if the insurer has valid reasons for the denial.
  3. Before considering a lawsuit, policyholders should explore alternatives like understanding their coverage, appealing the claim, or seeking mediation.
  4. It’s essential to keep detailed records of all interactions and expenses related to a claim, and consulting with a personal injury attorney can provide clarity on the best course of action.

You Can Sue Your Auto Insurance Company in Certain Situations

Depending on your situation, you may or may not be able to sue your insurance company.

If your insurer denies your claim after an accident, for example, then you may want to sue your insurance company. However, your case may be against the other driver – not your own insurance company. This restricts your ability to file a lawsuit against your insurer.

Situations also vary based on state insurance laws. Different states have different laws about suing your insurance company and suing other parties after an accident. Some states are no-fault states with a restricted ability to sue, while others are tort states with an expanded ability to sue.

Situations where you may be able to sue your insurance company include:

  • Your insurance company delayed your claim payout by an unreasonable length of time.
  • The insurance company or adjuster conducted an inadequate or drawn-out investigation of your claim without good cause.
  • Your insurer denied a legitimate, properly filed claim.
  • The insurer issued a payment for less than the amount you originally agreed upon.
  • An insurance company acted in bad faith to deny your claim.
  • The insurance company denied your claim without explanation or good cause.

Insurers Have the Right to Deny Insurance Claims

You could sue your insurance company. However, you may or may not win. Insurance companies have the right to deny insurance claims, which means your lawsuit may be unsuccessful.

If the insurer investigated your claim, found a reason to deny the claim, and did not act in bad faith at any other point during the claim, then you may have little cause behind your lawsuit. The insurer acted reasonably and rejected your claim for a cause. You are unlikely to win a lawsuit.

Schedule a Free Consultation with a Personal Injury Attorney

Most personal injury attorneys offer free consultations with no obligations.

During this free consultation, you can discuss the details of your claim, and the attorney explains the best path forward. If your lawsuit has a chance of successfully receiving compensation from the insurance company, then the attorney may accept your case.

It costs nothing to schedule a free consultation with a personal injury attorney. Consider scheduling a consultation to determine the best path forward for your situation with your insurance company.

Alternatives to Suing Your Car Insurance Company

You could sue your car insurance company. In many cases, however, there are better alternatives – like appealing your claim or going to claim mediation.

These alternatives can be more successful than filing a lawsuit against your insurance company. Instead of a long, drawn-out court case, you can achieve a similar resolution through other channels.

Here are some alternatives to consider instead of suing your insurance company:

  • Read and understand your coverage. Your insurer may have denied your coverage for good reason. Check your policy to make sure you understand how it works, what it covers, and what is not covered. If you only have minimum liability insurance, for example, then your insurer is unlikely to cover damage to your own vehicle after an accident.
  • Appeal your claim. Most insurers have a formal way to appeal your claim. If you’re unhappy with the outcome, then file an appeal. You may need to provide additional evidence supporting your claim – like photos or videos of the damage, eyewitness testimony, or a police report.
  • Work with a mediator. If a claim dispute cannot be resolved, then you and your insurer may agree to hire a mediator. A mediator acts as a neutral third party for the dispute. The mediator hears both sides, weighs the evidence, and then determines the best outcome.

If you’ve already tried the methods above and were unsuccessful, then it may be worth filing a lawsuit. Contact a personal injury attorney to explore your options.

Different States Have Different Rules for Suing Insurance Companies

Each state has its own set of insurance rules and regulations. Depending on your state, you may or may not be able to sue your insurance company.

In many states, for example, you can’t sue your insurance company for more damages after a claim because your case is against the other driver – not the insurance company.

Other states, meanwhile, allow you to file a bad faith tort lawsuit against your insurer. If your insurer dragged its feet, demanded excessive evidence, or dragged out the investigation without reason, for example, then you may be able to file a bad faith tort lawsuit.

Some states also allow you to file a lawsuit under unfair trade practices laws. Other states have formal regulations governing the insurance industry that determine when you can and cannot file a lawsuit.

Most states allow you to seek compensatory damages from a lawsuit against your insurance company. If you believe your insurance company should cover your medical bills and vehicle repair costs, for example, then you can file a lawsuit for compensatory damages. However, only a small number of states allow punitive damages, which are damages beyond what you have already paid.

Other Things You Need to Know About Suing Your Insurance Company

It may be in your best interest to sue your insurance company. Here are some tips to help:

  • Keep a record of all correspondence with your insurance company, including the names of anyone you talk to, the date of the conversation, and the topics discussed.
  • Keep all receipts related to medical bills, car repair costs, and other expenses related to your claim. From rehabilitation costs to vehicle repairs, you could receive compensation for all of these costs after an accident.
  • Review your policy from front to back to understand what’s covered. In many cases, a disagreement with your insurance company is linked to a policyholder not understanding the policy correctly.
  • Schedule a free consultation with an attorney specializing in insurance law. Many personal injury lawyers specialize in suing insurance companies or working with insurance claims.

Final Word

You may be able to sue your insurance company. However, depending on the situation, your case may have a low chance of success.

If your insurer acted in bad faith, denied your claim without cause, or dragged out your claim unnecessarily, then you could have a case against your insurer. In most cases, however, it’s not worth it to sue your auto insurance company.

Contact a personal injury attorney to determine if you should sue your insurance company. In some cases, suing your insurance company is the best way to get the compensation you deserve. In other cases, there are better alternatives available – like understanding your coverage, filing a claim appeal, or going to claim mediation.

James Shaffer
James Shaffer James Shaffer is a writer for and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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