Denied claims, bad faith, and coverage disputes.
Insurance lawsuits arise when a policyholder believes an insurer has wrongly denied a claim, delayed payment, underpaid a loss, or otherwise violated the terms of a policy or applicable insurance law — covering property, health, auto, disability, life, and commercial policies.
Common types of insurance disputes.
Common insurance disputes involve denial of coverage, underpayment of a covered loss, delays in claim handling, disputes over policy interpretation, and disagreements about whether a particular event falls within policy exclusions.
Property and casualty disputes often follow natural disasters, fires, or large losses. Health insurance disputes frequently involve denied treatments, network issues, and ERISA-governed plans. Auto, disability, and life insurance each have their own recurring patterns of dispute.
Bad faith claims.
Most states recognize a cause of action for insurance "bad faith" — separate from breach of contract — where an insurer unreasonably denies a claim, fails to investigate, or otherwise mishandles a policyholder's claim. Bad faith claims may allow recovery beyond the policy limits.
Depending on the state, bad faith damages may include emotional distress, attorney's fees, and punitive damages. The standards vary significantly by state, and some require specific procedural steps before a bad faith lawsuit can proceed.
First-party versus third-party claims.
First-party claims involve disputes between a policyholder and their own insurer — for example, a homeowner against their home insurer for fire damage, or a driver against their own auto insurer for uninsured motorist coverage.
Third-party claims involve a policyholder's insurer covering claims by other people — for example, liability coverage where a third party sues the policyholder. Each context has different procedures, rights, and standards. Many policies also require specific notice and cooperation from the policyholder, with consequences for non-compliance.