A typical American has several insurance policies. For many, these policies serve as a safety net for when misfortune occurs. Ideally, a person should have at least five policies to cover the basics – disability, life, health, homeowner’s, and automobile insurance. Depending on their career and hobbies, a person might have more.
Unfortunately, insurance carriers don’t always honor payouts. Of course, there could be valid reasons for a denial of an insurance claim.
However, instances do exist where these rejections are unfounded and should be contested by the claimant. In fact, just last year, more than 1,000 suits were filed by policyholders against insurers who refused to pay out Covid-19-related claims.
If you find yourself needing to sue an insurance carrier in New York, this article will help you get started.
Denial of Your Claim
Insurance companies have a wide range of reasons they can cite for denying a claim. The following are some common ones:
- Insurance fraud – When a claim is false or exaggerated, it can be grounds for insurance fraud. This carries legal consequences against the claimant.
- Lack of coverage – Insurers may say that the claim is not covered by the policy or may be part of its exclusions.
- Errors in the claim – Policies include rules for making a claim. Some policies, for example, only allow policyholders 24 hours to submit a claim.
- Errors during application – Misrepresentation during the application process may nullify the policy entirely.
If a claim is denied based on the reasons above, there may still be recourse if the claimant can prove the validity of their claim. Besides that, the following situations may also be grounds for a suit:
- The investigation made into the claim was delayed or inadequate.
- The claim was neither approved nor denied within a specified timeframe.
- The reason behind the denial of the claim was not explained.
- The claim was not paid despite the insurer having clear liability.
Service of Process
Service of process is the crucial first step in filing a suit against an insurer. Without timely and correct service of process, the lawsuit can be dismissed before it even properly begins. For this reason, hiring professional process servers is the best course of action.
In New York, when taking legal action against a state-registered insurance firm, the court documents have to be served to the New York Superintendent of Insurance.
According to section 1212 of the New York Insurance Law, all insurers in the state must file a power of attorney allowing the Superintendent to accept service of process on their behalf.
Going against an insurance company can quickly be overwhelming, especially since claimants are also usually dealing with misfortune or a loss during this time. The following tips can help lighten this burden:
- Get experienced lawyers. Seasoned insurance attorneys understand how insurers work, and they can build a strong case for the claimant.
- Document all correspondence. Every exchange with the insurer should be stored. Claimants should also expect similar treatment.
- Track all expenses. From attorney fees to medical bills, all expenses should be properly documented for future reference.
Many policyholders take legal action against their insurers over mistakenly denied claims or other similar issues. Although seemingly overwhelming, with good planning, a determined mindset, and the help of an insurance attorney and professional process servers, these suits can pay off.
For more information about filing lawsuits in New York, reach out to us by filling out the form on our contact page.