Can You Sue an Insurance Company?

Sometimes consumers must sue an insurance company acting in bad faith. It could be their health insurance company, their homeowner insurance provider, or a vehicle insurance group. New Mexico permits third-party claimants to sue an insurance agency that fails to follow through on paying out a claim. Regardless of whether it’s for a car crash that caused serious injuries, or a slip-and-fall accident that left you unable to work, insurance companies must follow through on their legal obligations to provide coverage. When they don’t, consumers can reach out to experienced attorneys that can hold insurance companies accountable.

What is insurance bad faith?

When you sign up for auto, home, life, or medical insurance, and follow through with paying your premiums regularly, you expect your insurance company to come through when you need them. Sometimes, that is not always the case. If you file a claim for coverage and the insurance company drags its feet (or flat-out denies payment), it might fall under the category of practicing insurance in bad faith.

According to the National Association of Insurance Commissioners (NAIC), the number one complaint about insurance companies is how they handle claims. From failure to pay at all to delaying payment until it causes hardship for the consumer, insurance companies sometimes engage in unscrupulous behavior.

New Mexico punishes bad faith insurance practices by allowing consumers to file lawsuits against insurance companies that engage in it. The Unfair Insurance Practices Act falls under New Mexico Statute 59A-16-20. Policyholders can seek compensation for their losses, attorneys’ fees, and other associated costs if they win a lawsuit for insurance bad faith.

Common insurance bad faith practices

How do you know when your insurance company is engaging in bad faith practices? Here are some of the most common scenarios where claims are delayed or denied. If any of these situations sound familiar, it may be time for you to contact an experienced attorney who can hold your insurance provider accountable.

Alleging late/non-payment of premiums

Sometimes insurance companies insist policyholders haven’t properly paid their premiums. They may accuse you of consistently paying late or not paying at all. Insurance companies use this to deny claims, insisting they are not legally obligated to pay out on a policy that consumers did not pay into.

Denial of coverage

Sometimes insurance companies claim a property, vehicle, or person is not covered by the policy. Since they deny coverage, they refuse to pay the claim. You must prove coverage exists to fight back on this tactic.

Excessive form filing requirements

Another game some insurance companies play is to have you fill out form after form, yet never process the claim. They insist all the paperwork is just a part of the process they must go through when filing a request for payment. No matter how many forms you fill out, there is always one more hoop you must jump through.

Repeated requests for the same information

Like the game some insurance companies play with the reams of endless paperwork, some repeatedly request access to the same information from policyholders. They claim they didn’t receive it the first time, or the information was incomplete when provided before. Keep copies of everything you provide and call out insurance companies that try to pull this scheme.

How to get help with bad faith insurance practices

Hiring an attorney can be the best solution for dealing with providers engaging in bad faith insurance practices. If you are a victim of someone else’s carelessness, and that person’s insurance company is refusing to pay on a claim, you may need the added benefit of working with an attorney skilled in personal injury law in New Mexico.

Contact Scott Atkinson today to schedule a free consultation to discuss your case. Call 505-944-1050 or book your appointment online.