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How To Sue An Insurance Company For Bad Faith: Step-by-Step Guide

If you feel that your insurance company has acted in bad faith, such as denying your claim without a reasonable basis or offering an unreasonably low settlement, you may qualify to take legal action. This step-by-step guide will explain how to sue an insurance company for bad faith so you can receive the money you deserve.

Continue reading this guide to learn more about suing an insurance company for bad faith, and then speak with a life insurance lawyer, like those at Boonswang Law, to handle your case. Suing an insurance company for bad faith requires years of practice and extensive knowledge of insurance law, and the life insurance attorneys at Boonswang Law have a proven track record of recovering over $200 million in life insurance benefits for clients.

Contact the insurance lawyers at Boonswang Law to sue your life insurance company for bad faith practices.

Steps to Take to Sue a Life Insurance Company for Bad Faith

To sue an insurance company for bad faith, you must understand what constitutes bad faith conduct, review your life insurance coverage carefully, and document every interaction you have with the company.  It is also essential to appeal the claim denial, file a claim against the insurance company, and work with a life insurance lawyer

Bad faith insurance practices can be challenging to prove, but with proper evidence and legal representation, you may have a strong case to get you the compensation you deserve.

Step 1: Understand What Constitutes as “Bad Faith” Conduct

The first step in suing a life insurance company for bad faith is understanding what constitutes bad faith conduct. Bad faith is a legal term that describes an insurance company’s behavior when it acts in a manner that is unreasonable or unfair to its policyholder.

Some common examples of bad faith practices include:

  • Deny claims without a reasonable basis
  • Delay the claims process unreasonably
  • Offer a settlement that is unreasonably low
  • Fail to investigate a claim properly
  • Misrepresent the terms of the policy
  • Fail to provide a timely and reasonable explanation for denying a claim
  • Fail to pay a claim within a reasonable time frame
  • Cancel an insurance contract without a valid reason
  • Refusing to renew a policy without a valid reason

Step 2: Review Your Life Insurance Policy Carefully

Before initiating a claim for bad faith insurance conduct, it is imperative to carefully review your insurance policy. This legally binding document serves as a contractual agreement between you and the insurance provider, outlining your rights and obligations as a policyholder.

Pay attention to the terms and conditions of your coverage, including any exclusions or limitations, the claims process, and any time limitations for filing a claim. Understanding your policy will facilitate effective navigation of the claims process and provide a solid foundation for supporting your argument against the insurance company’s alleged bad faith conduct.

Step 3: Document Every Interaction

Once you understand what constitutes bad faith conduct and have reviewed your insurance policy carefully, it is essential to document every interaction you have with the insurance company. This includes phone calls, emails, and in-person meetings. Keep a detailed record of the date, time, and content of each interaction.

Be sure to include the names and titles of representatives from life insurance companies you spoke with, and keep copies of all correspondence you receive from the insurance company. Documenting every interaction will help you build a strong case and help your attorney understand the facts of your case if you decide to sue the insurance company for bad faith.

Here are some tips for documenting your interactions with the insurance company:

  • Keep a claims journal
  • Save all correspondence
  • Record phone calls
  • Take notes during in-person meetings

Step 4: Appeal the Claim Denial

Appealing the denied claim is an essential step in the process, as it gives the insurance company an opportunity to reconsider its decision. To appeal the claim denial, you should submit a written letter to the insurance company outlining the reasons why you believe the claim should be approved and include any new evidence you have to support your claim.

The insurance company has a limited amount of time to respond to your appeal, depending on the state you reside. If they do not respond within that time frame, you may be able to file a lawsuit against them. If the insurance company responds to your appeal and upholds its denial, you can then file a bad faith lawsuit against them with the help of a seasoned insurance attorney who can build you a strong case and represent you in court.

Step 5: File a Claim Against the Life Insurance Company

Once you have completed your appeal and gathered all necessary documentation, the next step is to formally file a claim against the life insurance company for acting in bad faith. This involves preparing a legal complaint that outlines your case, the evidence you have amassed, and the damages you seek.

Your life insurance attorney will play a key role in this process, ensuring that the bad faith lawsuit is filed correctly and on time. Filing a claim initiates the legal process and signals to the insurance company that you are serious about pursuing your rights. It sets the stage for your case to be heard in court, where a judge or jury can assess the evidence of bad faith and determine the appropriate compensation.

Step 6: Work With An Experienced Life Insurance Attorney

Working with a seasoned life insurance attorney is pivotal when confronting a bad-faith insurance claim. Life insurance lawyers are well-versed in the intricacies of insurance law and can effectively advocate for your rights. Their background in life insurance cases increases your chances of a favorable outcome and ensures that every aspect of your case is handled properly.

Your attorney will provide guidance throughout the legal process, offering clear explanations of your options and possible outcomes. You should be completely transparent with your attorney, ensuring you disclose all relevant details and information. Withholding any information can significantly impact the effectiveness of your legal representation.

A life insurance dispute attorney will prepare your case, represent you in negotiations with the insurance company, and, if necessary, present your case in court. By leveraging their knowledge and years of practice, a life insurance lawyer aims to achieve the justice and compensation you deserve and alleviate the stress and uncertainty that often accompany these disputes.

Why Insurance Companies Act in Bad Faith

Insurance companies may act in bad faith to avoid paying out claims and protect their financial interests. This behavior can manifest when they unreasonably deny a valid claim, delay processing without justification, or fail to conduct a thorough investigation. Such actions often leave policyholders facing undue hardship and financial strain.

In some cases, insurance firms engage in bad faith practices to pressure policyholders into accepting lower settlements. By prolonging the settlement process or undervaluing claims, they exploit the policyholder’s need for timely resolution, often leading to financial desperation. This unethical strategy undermines the trust between insurers and policyholders and violates the legal obligations insurers have to act in good faith and fair dealing.

Is Bad Faith Difficult to Prove in Life Insurance Claim Denials?

Proving bad faith in life insurance claim denials can be challenging because the insurer must demonstrate that its conduct was unreasonable and without proper cause. Policyholders must provide clear evidence that the insurance company had no reasonable basis to deny the benefits and that it knowingly or recklessly disregarded this lack of a reasonable basis.

This often involves a detailed examination of the insurer’s procedures, the policy in question, and the specifics of the case, requiring professional legal assistance to navigate successfully. Many policyholders seek the aid of attorneys specialized in insurance law to build a strong case and challenge the insurer’s stance with compelling arguments and substantiated proof.

Speak With An Attorney At Boonswang Law To Learn What Your Case Is Worth

At Boonswang Law, our team of skilled life insurance attorneys is committed to championing the rights of policyholders facing bad faith insurance issues. With a track record of recovering over $200 million in life insurance benefits for our clients, we bring years of practice and a commitment to securing the justice and compensation you deserve.

By partnering with the life insurance lawyers at Boonswang Law, you’ll benefit from personalized legal representation that is focused on maximizing your recovery and holding insurance companies accountable for their actions.

Contact Boonswang Law today to speak with a life insurance attorney and see how you can sue an insurance company for bad faith practices.

Written By: Chad Boonswang
Chad G. Boonswang, Esquire is a litigation lawyer based in Philadelphia, PA. Selected as an ASLA 2014, 2015, 2016, 2017 and 2018 Top 100 Litigation Lawyer, Mr. Boonswang plays to win. As a lawyer, athlete, and scholar, he has always put in the energy, time, and commitment to be the best. After working for several prominent law firms in Philadelphia, including Montgomery McCracken Walker & Rhoads LLP, he founded his own practice in 2002.  Since then Chad has recovered tens of millions of dollars on behalf of his clients from life insurance claims and catastrophic injury cases.  Year after year, he has earned a 10.00 Superb rating on Avvo.

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