California drivers can sue their own insurance companies when claims are wrongfully denied, delayed or undervalued.
Insurers owe policyholders a duty of good faith and fair dealing under California law.
Lawsuits can be filed over true bad faith conduct, not routine coverage disputes.
People often sue their own insurer over uninsured motorist coverage or MedPay after an accident leads to a personal injury.
Call our experienced bad faith insurance claim lawyers today for a FREE consultation at (800) 718-4658 or contact us if you or a loved one was injured or killed in an accident and is now dealing with an insurance company who is acting in bad faith. We have been handling bad faith claims for over 35 years, can help you seek fair compensation for your medical expenses, lost wages, pain, suffering and more, and will charge you no legal fee unless and until we win your case.
Can I Sue My Car Insurance Company?: Key Takeaways
- California policyholders can sue their own auto insurance policy providers for denying, delaying or undervaluing valid claims.
- Bad faith can include unreasonable claim denials, lowball offers and unjustified payment delays.
- Lawsuits against your own insurance provider are first-party claims, different from third-party claims against the other driver’s insurance company.
- Preserving claim records and communications is important when evaluating a potential lawsuit. A policyholder may also choose to submit a complaint to the California Department of Insurance.
- Successful bad faith claims can lead to policy benefits plus compensation tied to an insurer’s conduct.
Table of Contents
- Why Would You Sue Your Own Insurance Company?
- What Is the Difference Between a First-Party and Third-Party Claim?
- What Counts as Bad Faith Under California Law?
- What Happens if You Sue Your Own Insurance Company?
- How Long Do You Have to File a Bad Faith Insurance Claim in California?
- How to File a Lawsuit Against Your Insurance Company
- When to Contact a Car Accident Attorney
- Frequently Asked Questions
Why Would You Sue Your Own Insurance Company?
You can sue your own insurance company for breach of contract or bad faith if they fail to honor the coverage you have paid for.
Common reasons for hiring a personal injury law firm to help you sue your own insurance company include:
- Insurance companies denying claims for collision coverage, personal injury protection, medical payment coverage or uninsured motorist coverage without a valid, policy-based reason
- Settlement offers which don’t come close to covering all of the documented medical bills or repair costs
- Long delays without a clear explanation from the insurance adjuster
- Refusals to properly investigate claims tied to accidents
Reasons such as the above shift disputes from coverage questions to legal questions which can lead to injury victims taking legal action, attempting to recover financial compensation with the help of an experienced attorney.
Uninsured Motorist Coverage
Uninsured motorist coverage (UM) is often involved when people sue their own car insurance company.
UM coverage protects people against the negligence of uninsured drivers.
It can cover future medical bills relating to treatments that are recommended by doctors, and it can pay for pain and emotional distress.
Common reasons for people filing lawsuits to hold their insurers accountable over UM include:
- Denied claims
- Unreasonably delayed payments
- Lowball offers
- Ignored communication
- Disputes over hit-and-run accidents
What Is the Difference Between a First-Party and Third-Party Claim?
First-party claims are filed against your own insurer. Third-party claims are filed against the other driver’s insurer.
Third-party claims apply when another driver causes an accident.
First-party claims apply to:
- Uninsured motorist coverage
- Underinsured motorist coverage
- MedPay
Policyholders are customers and claimants in first-party disputes. This dual role is why these claims often feel personal and frustrating.
What Counts as Bad Faith Under California Law?
Bad faith occurs when an insurer unreasonably withholds benefits owed under a policy.
Examples of bad faith include:
- Refusing to investigate a claim in a fair and timely manner
- Making a settlement offer which no reasonable adjuster would consider to be adequate
- Delaying a payment without a legitimate basis outlined by the policy
California Insurance Code Section 790.03 defines unfair insurance practices which are enforced by the Insurance Commissioner.
Courts weigh insurers’ conduct, not just the outcome, when they evaluate bad faith.
Some states, such as California, allow for punitive damages to be awarded when severe bad faith involving malice, oppression or fraud occurs regarding insurance claims.
What Happens if You Sue Your Own Insurance Company?
Bad faith lawsuits ask courts to hold insurers accountable for how they handled claims.
You may potentially recover policy benefits which should have been paid in the first place.
You may recover compensation tied to any financial hardship caused by a delay or denial.
You may recover punitive damages if your case involves egregious insurer conduct involving malice, oppression or fraud.
You can recover attorney fees if you win a bad faith lawsuit against your insurance company in some jurisdictions, such as California.
The outcome of any given case will depend on the specific facts, documentation, and severity of the insurer’s conduct involved.
How Long Do You Have to File a Bad Faith Insurance Claim in California?
You have, in most cases, two years to file a tort bad faith claim and four years to file a breach of contract claim in California.
Tort bad faith claims allow people to seek damages for emotional distress as well as punitive damages. The two year time limit begins when you knew or should have known about a bad faith act.
Breach of contract claims do not allow people to seek damages for emotional distress or punitive damages. They only allow people to recover the value of their policy and any financial losses directly caused by the breach of contract.
There are some exceptions to the above time limits. Some can shorten the time limits. It’s crucial to contact a lawyer as soon as possible if you’re dealing with bad faith or a breach of contract so evidence can be preserved, your lawyer can have as much time as possible to build a strong case for you, and your legal rights can be preserved.
How to File a Lawsuit Against Your Insurance Company
Steps to take prior to filing a lawsuit against your insurance company include:
- Gather evidence by compiling your insurance policy, denial letters, photos, repair estimates and a detailed log of all communication with your adjuster. Document all communication with the insurance company prior to filing a lawsuit.
- One should exhaust their insurance company’s internal appeals process before suing.
- You may consider alternative dispute resolution methods before filing a lawsuit.
- Report your insurer to your state regulator prior to filing a lawsuit. State regulators investigate unfair practices and are sometimes able to force resolutions.
A lawyer can help you with all of the above steps.
Once the above has been completed, if you haven’t already, hire legal representation. They will evaluate if you have a valid bad faith or breach of contract claim.
Your lawyer will then draft a formal lawsuit which outlines the insurer’s failures and the compensation you’re seeking, and will serve the insurance company with the lawsuit.
When to Contact a Car Accident Attorney
Call us today for a FREE consultation at (800) 718-4658 or contact us if you or a loved one has been injured or killed in an accident and is dealing with an insurance company that is acting in bad faith.
We can help you seek fair compensation for your injuries and will charge you no legal fee until we win your case.
Call us today.
Frequently Asked Questions
Can I Sue My Insurance Company for Emotional Distress?
Yes. You can sue for emotional distress if your claim is wrongly denied by an insurance company acting in bad faith.
Courts recognize that bad faith denial of insurance benefits causes severe financial anxiety and mental anguish.
You probably have grounds to sue over emotional distress if your insurer:
- Unreasonably refused to investigate your claim
- Has made unreasonable settlement offers
- Has delayed payment or response times far beyond the legal limits in California
- Has intentionally ignored a doctor’s report to avoid paying you
Can I Sue My Insurance Company for Taking Too Long?
Yes. You can sue your insurance company for bad faith if their delays are unreasonable and violate timelines that are state-mandated.
Insurance companies, in California, must acknowledge claims within 15 days of receiving them, accept or deny claims within 40 days of receiving proofs of claims (or request 30 day extensions every 30 days when more time is necessary), and pay claims within 30 days of accepting settlements or liability.
Can I Sue My Insurance Company for Denying My Claim?
Yes, you can file an insurance bad faith or a breach of contract lawsuit if your insurance company wrongfully denies your claim.
Can I Sue My Insurance Company for Pain and Suffering?
Yes, you can sue an insurance company acting in bad faith for pain and suffering.
This means that while you can’t sue for pain and suffering if they’re simply denying a standard claim, you can sue if they unreasonably delay, lowball or wrongfully deny your claim.
Can I Sue My Insurance Company for Negligence?
Yes, you can sue an insurance company who is acting negligently, but the claim will typically be filed as an insurance bad faith claim rather than a standard negligence claim. These lawsuits are filed when insurance companies unreasonably deny, minimize or delay claims.
Can You Sue Your Own Insurance Company for Injuries?
Yes. You can sue your own insurance company if they act in bad faith after an injury claim.
While you can’t sue your insurance company for the underlying accident, you can sue them if they unreasonably undervalue, deny or delay a claim, such as a claim for MedPay or uninsured motorist coverage.
Can I Sue My Insurance Company for Bad Faith?
Yes. You can sue your insurance company for bad faith if they unreasonably withhold or delay policy benefits.
Should I Sue My Insurance Company for Unethical Insurance Practices?
You should strongly consider pursuing legal action over insurance bad faith if you are facing unreasonable delays, unexplained denials or lowball offers.
A successful lawsuit may allow you to recover your original claim amount, financial compensation for emotional distress and punitive damages for malicious conduct.
Can I Sue My Insurance Company for Canceling My Policy?
Yes, you can sue your insurance company for canceling your policy wrongly in a way that violates state law or the terms of your contract.
This means you can file a lawsuit if your insurance company wrongfully cancels your policy in order to avoid paying a valid claim.
