Can You Sue Your Insurance Company?

If your insurance company failed to pay your claim in a timely manner or neglected to recommend the proper insurance to cover business losses and you’d like to sue your insurance company, Cleveland attorney Tom Robenalt welcomes you to contact our office for a free consultation. Tom has practiced law for more than 20 years and began his career at an insurance defense firm, where he represented corporations and insurance companies and learned how to fight these big entities. Call 216.223.7535 today to put that experience to work for you.

Can You Sue Your Insurance Company for Bad Faith?

As the Ohio State Bar Association (OSBA) said, “Every insurer owes its policyholder a duty to act in good faith in the handling and payment of claims. … ‘Bad faith’ occurs when the insurer violates its duty to handle and pay its policyholder’s claims in good faith.”

“Simply put,” freeadvice.com said, “this means that the insurance company must not look for ways to escape its obligation to investigate the claim or to pay you.”

If your insurance company acted in bad faith, you may be able to sue.

Bad Faith Lawsuit Example #1: Failure to Pay a Claim (or Failure to Pay It Timely)

You may be able to sue your insurance company if it “refuses to pay your claim without reasonable justification” or if it let your claim languish for months, according to the OSBA. Insurers are supposed to investigate claims quickly. If your insurance agent failed to do so or kept asking the same questions over and over, delaying the investigation, you may be able to file a bad faith claim. In fact, Ohio is one of few states that allows you to sue your insurance company for bad faith even if it paid your claim.

Bad Faith Lawsuit Example #2: An Errors and Omissions Claim

“Failing to get the appropriate coverage for a client is a serious error and one of the most common reasons why insurance agents get sued,” according to insureon.com. Errors and omissions claims commonly occur due to:

  • Failure to procure coverage
  • Failure to explain policies
  • Failure to analyze risks
  • Failure to recommend coverage
  • Miscommunication between the agent and the insurer
  • Missed deadlines.

Lawyers, insurance agents, and other professionals “have special knowledge and training to perform their professional services,” the Wall Street Journal said. “In order to practice, these professionals are required to earn specialized degrees and comply with relevant regulations, and they are held to a certain standard of care related to their professions.” But mistakes happen, so professionals are expected to carry errors and omissions insurance in case their advice – or lack thereof – causes their client to suffer a loss.

Bad Faith Example #3: Settling a Claim for Far Less Than It’s Worth

As FreeAdvice stated, insurance companies are also sued for bad faith when they offer “substantially less money” than a claim is worth. For example, a jury found that an insurance company acted in bad faith when it offered “$10,000 on policy limits of $300,000 to parents whose only child was killed in an auto accident.” The jury awarded the father $429,310 in compensatory damages and $3.9 million in punitive damages, according to FindLaw.

Insurance Claim Attorney Tom Robenalt Welcomes Your Questions

If you have questions about suing your insurance company, Cleveland attorney Tom Robenalt, who’s licensed to practice in Ohio and Florida, invites you to contact his office by calling 216-223-7535, submitting this form, or emailing trobenalt@robenaltlaw.com.

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