Can I Sue My Insurance Company?

Whether it’s a car accident, property damage, or any other unfortunate event, you depend on your insurance to back you up. But what happens when they don’t?

This article aims to shed light on your rights and the process involved in taking legal action against your insurance company in Canada.

Understanding Insurance Contracts

Insurance contracts are legal agreements that bind you and your insurance company to certain obligations and privileges. These contracts promise that, in exchange for your premiums, your insurance coverage will pay certain losses and damages as outlined in your policy.

Disputes often arise due to misunderstandings or disagreements over the terms of these policies.

Common issues include:

• Claim Denial: Your insurance company might refuse your claim if they believe it doesn’t fall within the scope of your coverage.

• Coverage Disputes: There might be disagreements over what is covered under your policy, especially with complex clauses and exceptions.

• Settlement Offers: Sometimes, the settlement offer from the insurance might not align with the damages incurred.

Grounds for Suing an Insurance Company

“Can I sue my insurance company?”

Yes. Under Canadian law, insurance companies can be sued with proper evidence. There are various legal grounds for taking action:

• Denial of Valid Claims: Your insurance company denies a claim that clearly falls under your policy’s coverage without a justified reason.

• Underpayment: They offer a settlement amount significantly lower than the fair value of your claim or the amount specified under your policy.

• Delays: There are unreasonable delays in processing your claim or in making payments that have been agreed upon.

• Bad Faith Insurance Practices: This includes a range of unfair practices, such as not investigating your claim properly, misrepresenting the terms of your coverage, and failing to communicate effectively about your claim’s status.

Here are some examples:

• An insurance company might delay investigating a claim related to a car accident, restricting the claimant’s ability to receive accident benefits when they need them.

• A property damage claim might be unjustly denied based on a misinterpretation of the policy terms by the insurance agent.

• In cases of personal injury, the settlement offer might not cover the full extent of the accident victim’s medical expenses and lost wages.

It’s important to view a lawsuit against your insurance company as a last resort. Disputes can often be resolved through negotiation or mediation. However, if your insurance company refuses to act in good faith, suing them might be the only way to obtain the compensation you deserve.

The Process of Suing an Insurance Company

Dealing with insurance disputes can be challenging, especially when it feels like you’re at a deadlock. Let’s unpack the process of suing your insurance company step-by-step.

Step 1: Contact a Lawyer

Before taking legal action, consult with a lawyer who specializes in insurance law. They can offer you tailored advice and help assess the viability of your case. A lawyer will also guide you through the necessary steps and represent your interests throughout the process.

Step 2: Attempt to Resolve the Dispute Out of Court

• Mediation and Negotiation: Before filing a lawsuit, it may be beneficial to attempt to resolve the issue through mediation or negotiation with the assistance of your lawyer. This can be a faster and less costly way to achieve a satisfactory outcome.

• Insurance Company’s Ombudservice: Engage with your insurance company’s internal dispute resolution process. This might involve presenting your case to an ombudsperson who can offer an independent review.

• General Insurance OmbudService (GIO): If the internal process doesn’t resolve the issue, the GIO can provide assistance. They help mediate disputes between policyholders and their insurance companies.

Step 3: File a Lawsuit

• Preparing Your Case: Your lawyer will prepare the necessary legal documents, including a Statement of Claim, which outlines your case against the insurance company.

• Filing in the Right Court: Depending on the amount you’re suing for, your case might be filed in Small Claims Court (for claims under $35,000) or Superior Court of Justice (for claims over $35,000 or specific types of orders).

Step 4: Pre-Trial Procedures

• Serving the Statement of Claim: The insurance company must be formally notified of the lawsuit through a process called “serving.”

• Discovery: Both parties exchange evidence and information relevant to the case. This includes documents, witness statements, and other evidence supporting your claim.

• Mandatory Mediation: In certain circumstances, parties are required to undergo mediation to try to settle the dispute before going to trial.

Step 5: Trial

• Presenting Your Case: If mediation doesn’t result in a settlement, your case will go to trial. Both sides will present their evidence and arguments before a judge (and sometimes a jury).

• Duration: Trials can last from a few days to several weeks or more, depending on the case’s complexity.

• Decision: At the end of the trial, the judge will make a decision. If the court rules in your favour, it will specify the amount of money the insurance company must pay you.

Step 6: Post-Trial

• Appeals: Either party can appeal the court’s decision if they believe a legal mistake was made. Appeals can add significant time to the resolution of your case.

• Enforcement: If you win your case and the insurance company does not voluntarily pay the judgment, you may need to take steps to enforce the judgment.

Timelines and Potential Costs

• Timelines: The entire process, from filing a lawsuit to a trial and potential appeals, can take a few months to several years, depending on the case’s complexity and court schedules.

• Costs: In addition to legal fees, expect to incur costs for court fees, document production, expert witnesses, and possibly enforcement of judgment.

Considerations Before Suing Your Insurance Company

Taking legal action against your insurance company is a significant step that requires careful consideration. Before proceeding:

• Assess the validity of your claim and the evidence supporting it. Consult with a personal injury lawyer who can evaluate the merits of your case, especially in scenarios involving car accidents or property damage.

• Legal proceedings can be costly and time-consuming. Consider whether the potential recovery outweighs the legal expenses and the emotional toll.

• Explore options such as mediation or arbitration, which can be less adversarial and more cost-effective than court litigation.

Seeking Legal Advice

“Is suing my insurance company a good idea?”

Before making any decisions, talk to an insurance lawyer. They can offer crucial insights into:

• Expected Outcomes and Timelines: A seasoned lawyer can provide realistic expectations about the success of your case and its timeline, guiding you through the complexities of legal action against insurance companies.

• Personalized Guidance: Your lawyer can advise on whether your case involves issues of bad faith insurance or if you’re entitled to punitive damages. They ensure your rights are fully protected.

Take Action and Get What You Rightfully Deserve

If you’re considering legal action, benefit from Allan Rouben’s experience in handling insurance disputes. My experience advocating for accident victims can help ensure your case is handled effectively within the legal system.

Let’s work together for a just outcome. Contact me today.