Your insurance claim lawyer can make a claim on your behalf when an insurance company fails you in one of the following ways:
- fails to pay a valid claim
- denies the claim without giving a reason for denial
- delays the payment of a claim without reason
- refuses to investigate a claim
- makes a very low settlement offer
- makes unreasonable demands for documentation
Many people are disheartened to realize that after diligently paying premiums for years, the insurance company, in the end, would deny the claim or pay a small amount of the total claim.
In cases of expensive or complex claims, large claims such as property damage due to fire, tornadoes, or extensive water damage, or claims where fault is hard to establish, it is best to get an insurance claim lawyer to help you, especially when the insurance adjuster doesn’t agree with your claims early on in the process.
Litigation against an insurance an company for denying or underpaying a claim
Insurance claims are generally contract claims. In the insurance contract, the insurance company agrees to pay the insured’s beneficiary an amount upon the happening of a fortuitous event that is materially adverse to the insured.
For example, in a life insurance policy, the happening of a fortuitous event that is materially adverse to the insured is the death of the insured. When the insured person dies, the insurance company agrees to pay an amount to the insured’s beneficiary. In home insurance cases, when a fortuitous event materially adverse to the insured that is covered by the insurance contract, such as a tornado, occurs, destroying the insured’s house totally (for example), the insurance company pays the insured’s beneficiary (which could be the insured person or a third party like the bank) the amount of claim covered by the insurance contract. When the insured company fails to pay the claim, there is a breach of contract.
However, if the insured can prove that the insurance company acted in bad faith in denying his claim, then an additional cause of action arising from tort occurs. In a tort claim, the beneficiary can claim for an amount higher than that provided in the policy due to the prayer for payment of punitive damages. One may have a cause of action for bad faith against an insurance company.
For example, John’s house was partially destroyed by a hurricane in March 2016. He makes a claim for property damage in his house with the insurance company. The insurance contract provides for a shortened period of 2 years from the time of loss to file a case in court. However, the insurance company kept on asking for more documentation from John that it only gave John the denial of the claim on April 2018. By the time John received the insurance company’s denial, the period to file a case with the courts have already expired under the insurance contract. John can argue a case for bad faith against the insurance company for delaying the payment of his claim to the end that the statute of limitation to file his claim had already expired.
Many insurance companies profit from the denial of claims. Most people let their denials go, without appealing the decision. These denials allow the insurance companies to earn more, despite the fact that they may have been really liable under the insurance contract. It is best to consult with an insurance claim lawyer to know your remedies and options.
Statute of Limitations
Under New York law, breach of contract claims should be filed within 6 years from the time the cause of action accrues (the statute of limitations). However, most insurance contracts have provisions shortening the statute of limitations, and New York courts have upheld such provision.
In Anderson v. Allstate Ins. Co., 2019 N.Y. Slip Op. 02768 (3d Dept. Apr. 11, 2019), the court upheld the provision in the contract stating that suit should be commenced within 24 months after inception of loss. In this case, the statute of limitations began, not when the claim was denied by the insurance company but at the time of loss (which means the happening of the fortuitous event materially adverse to the insured that was insured against). In the case, since the burglary (which was the event that was insured against) occurred prior to September 2014, and the case was filed with the courts on October 2016, the court denied the claim of the insured against the insurance company for being filed outside the period required by the contract.
An insurance company’s interests will always be adverse to the insured’s interest. For this reason, it is recommended to seek the advice of counsel in making claims, especially large or complex claims, with the insurance company.
When To Get a Lawyer
Most people get an insurance claim lawyer when the insurance company denies the claim. However, it is recommended to consult a lawyer before the denial of the claim. The lawyer can review the contract regarding any provision shortening the statute of limitations and can alert you in the need to file a case. The lawyer may also help you in strengthening the evidence to be presented to the insurance company in order for the claim to be allowed.
Getting a lawyer at the end of the process when the insurance company denies the claim gives you no other resort than to file a case, which could lead to more expensive costs. Sometimes, a demand letter from a lawyer is sufficient for an insurance company to take your claim more seriously.
Lawyers’ Fees in Insurance Cases
Although most lawyers charge an hourly rate for cases, you may find some lawyers who would take your case on contingency basis, especially when your claim is strong. These lawyers would charge a contingent fee of 35% when the claim is settled without litigation, and a higher percentage such as 40% if the claim has to be litigated. The first consultation is normally free, so it doesn’t hurt to ask insurance claim lawyers, especially when you are dealing with large and complex claims.
Insurance companies know that not all people appeal denials. Some companies have made it a business to deny claims in order to increase their profits. If this is happening to you, consult an insurance claim lawyer immediately. Should you need assistance, we, at the law offices of Albert Goodwin, are here for you. We have offices in New York, NY, Brooklyn, NY and Queens, NY. You can call us at 718-509-9774 or send us an email at firstname.lastname@example.org.