Laura Berry is a former State Farm insurance producer and insurance expert.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 18, 2021

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Important facts to know...

  • You can sue a car insurance company
  • If you are going to sue a car insurance company, you need to be able to prove that they processed your claim in bad faith
  • You will need to hire an attorney if you plan to sue a car insurance company
  • Regardless of the outcome, you may want to change insurance companies by using a car insurance comparison tool to find and purchase a new policy

There are certain conditions where you can sue your car insurance company.

Generally, those conditions revolve around your car insurance company denying your claim or offering you an unfairly low settlement in bad faith.

If you believe that your car insurance company is operating under bad faith practices, you can use a comparison tool to find a company with better customer service and fairer business practices.

Start comparison shopping today by using our FREE online quote tool! Enter your ZIP code above to get started!

Good Faith Practices and Insurance Carriers

Insurance companies must act in good faith, which is defined by the Legal Information Institute at Cornell University as an agreement between two parties that implies they will deal fairly with one another. It applies to the car insurance industry.

To operate in good faith, an insurance company must take every car accident claim seriously and investigate that claim.

The car insurance company must decide within a reasonable amount of time, and if they deny your claim, they must provide a valid reason.

The auto insurance company must also provide you with adequate compensation if they approve your claim. Your agent or a representative of the company cannot threaten or harass you at any point before, after, or during the claims process.

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Bad Faith Insurance Practices

Bad faith insurance practices include:

  • Unfairly delaying your claim
  • Refusing your claim for no reason
  • Offering you monetary compensation that does not adequately cover your car accident expenses

If you believe that your car insurance company is operating in bad faith, you can sue them and use a comparison tool to find a different car insurance policy at a different company that offers better business practices.

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What to Do When You Are Considering Suing Your Insurance Company

When suing your insurance company becomes a viable option, you should make sure you’ve done all you can do to try and sort through the problem with your auto insurance carrier.

Doing all you can means calling them, provide them with all the needed documentation, and appealing any denial or unfairly low offer.

After you’ve exhausted all these options, you should consider suing the insurance company.

Suing the Insurance Company

Before you sue an insurance company, you will want to consult with a lawyer specializing in suing car insurance companies.

The attorney will ask for all the documentation related to the car accident. They will ask you specific questions about the accident and how your car insurance company has handled the claim thus far.

The documentation should include:

  • Any medical bills for injuries sustained during the accident
  • Documentation of any missed time at work
  • Estimates for the repair or replacement of your vehicle
  • All the communication between you and the insurance company
  • All of the documentation about the accident, including any police reports and citations issued

After reviewing your documentation and listening to you, the attorney will decide whether or not they will accept your case.

If the attorney does accept your case, they will prepare a letter on your behalf, explaining the situation and legal reasons for the lawsuit. The letter will also ask for a specific amount of compensation to cover your losses and attorney fees.

Some back and forth communications will ensue between the car insurance company and your lawyer.

Cases like this rarely go to court. Instead, once a satisfactory settlement amount has been reached, you will be asked to approve the amount.

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Finding a New Insurance Company

Suppose you are in the process of suing your car insurance company or are thinking about suing your car insurance company. In that case, there’s a good chance that you no longer want to be their customer.

Thankfully, you can find another insurance company with better business practices and less costly insurance policies using a quote comparison tool.

Most comparison tools will even allow you to choose and purchase your new policy online.

Start comparison shopping with our FREE online quote tool! Enter your ZIP code below to compare the best auto insurance rates!