Jessica Sautter is a Content Writer for with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Sep 26, 2020

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Key takeaways...

  • You may have a legitimate reason to sue your own car insurance company, but you want to make sure that you are able to invest the time and money in your case before going forward
  • The main reason why you may want to sue your own car insurance provider is that you feel that your claim was not handled as it should have been
  • If your car insurance company acted in bad faith in either refusing to settle your claim or offering a settlement well below what you think you are entitled to, then litigation may be your last resort in trying to recover your damages
  • It is best to retain the services of a lawyer in your state if you plan to file suit against your insurance company because the insurance provider will most certainly have legal representation
  • Once a lawyer represents you in a case, then all further communications with your insurance company will be through your attorney

Suing your auto insurance company is usually a very last resort when you cannot get a claim settled the way that you think it should be.

You certainly have the right to sue your insurance provider if it acts in bad faith in not resolving your claim in a reasonable way, but you should be prepared to invest significant time and resources in bringing a lawsuit against your insurer.

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Dealing with Your Car Insurance Company After You File a Claim


The most typical reason that you would file a claim through your own insurance is that your car was damaged from an incident, and you could not recover from another driver or person involved.

For example, if you are in an auto accident that was your fault with another driver and your car is damaged, your own collision insurance would be used to pay for any repairs to your car.

When you go through the claims process, it is vital that you follow all of the requirements from the car insurance company and keep a good record of the steps you have taken and information you have gathered.

If your claim cannot be resolved to your satisfaction, this information could be very important down the line in addressing your claim.

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The Rights of the Policyholder in the Claims Process

Keep in mind that you have certain rights as the owner of the car insurance policy when you file a claim. In exchange for receiving your premium payments, the auto insurance company has an obligation to resolve your claim in good faith.

In fact, every state insurance department holds insurance companies accountable for their failure to negotiate with policyholders in good faith regarding their claims.

One of the ways that your auto insurance provider may have acted in bad faith in the claims process is if your claim is denied outright without any reasonable investigation into the circumstances.

The insurer has a duty to reasonably consider the information you provide and conduct its own inquiry before it denies any coverage of your claim.

In addition, if the insurance provider does not communicate with you during the claims process, this is another example of bad faith actions.

You have a right to know the status of your claim and where the insurance company is in the process of deciding the outcome of your claim. Not getting responses from your insurance company should be a red flag for you during the settlement of your claim.

Also, if the insurance company offers you a settlement for way below what you think is reasonable in your circumstances, then you may need to consider your options for legal action against your insurance company.

It is best to put all of your communications in writing and go as far up the chain of command you can within the insurance company before resorting to filing a lawsuit to recover your reasonable damages.

Evaluating Your Potential Case Against Your Insurance Company


If you are at the stage where you are unsatisfied with the settlement offer from your auto insurance company, you may be able to get an impartial third party to weigh in on whether the settlement amount was fair.

You may want to go through the American Arbitration Association to get an arbitrator in your area.

Another option to go straight to an experienced attorney who has demonstrated success in dealing with auto insurance companies. In general, most attorneys do not charge for an initial consultation to determine whether it is worth going forward with your case.

You will want to be sure to get the fee structure in writing so that you know exactly what you are responsible for paying for your legal representation.

Whichever option you decide to pursue, you do not want to wait too long before moving forward.

Every state has a different statute of limitations, which is the deadline by which you must bring a lawsuit in order to enforce your rights.

Once this deadline has expired, you will be unable to resolve your dispute in court and will have much less leverage over the auto insurance company in getting to a reasonable settlement.

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After a Poor Experience with Your Auto Insurance Provider

If you are considering bringing a lawsuit against your insurance company, then it is safe to say that you are probably highly dissatisfied with the service you have received.

This is a very good reason to consider other auto insurance options in your area. Before you cancel your coverage with your current insurance company, it is essential that you have your next provider in line to have your next policy go into effect.

Here are some tips for finding new coverage:

  • Comparison shop for options
  • Get advice from friends
  • Check your department of insurance.

Shopping for car insurance options is easy because it can be done online from your own home. You will instantly get an idea of the price that you could pay, but it takes a little more digging to find out whether that car insurance company will be a good fit for you.

To avoid unpleasant experiences with the settlement of a claim, ask as many people as you can about the experiences that they have had with the car insurance company that you are considering.

This is sometimes the best source of information to give you an idea of what it will be like to do business with another insurance provider.

You also want to check with the state department of insurance to see if there are any pending issues against the auto insurance provider that you are considering.

Even if you hit it off with a particular insurance agent, the company that they represent will be the one handling all of your claims settlement. You do not want to get stuck in the same unpleasant situation again.

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Adjusting Your Coverages After the Denial of a Claim


It is possible that your claim has been denied because you do not have adequate coverage for that type of claim. This is why it is so important that you have a good idea of what you are really getting with your auto insurance policy when you go to sign for it.

If you find that you do not have coverage for damage to your own vehicle that you caused, then it might be time to consider expanding your coverages.

This could include getting comprehensive and collision coverage because you do not want to be stuck without protection if you have to replace your car after an accident that you caused.

Any time that you add an additional coverage to your insurance policy, you should expect some sort of increase in your price. However, optional coverages and increasing your policy limits might not be as expensive as you would think.

The only way to know for sure is to get a quote for the types of policies that you are considering. This can be easily done online so that you can be sure you are not missing out on a good deal.

Going through the claims process is often a painful yet productive time to give serious thought to whether you really have all of the coverage that you might need. It is a good reminder that paying for car repairs out of pocket can be an unexpected and expensive cost.

Suing Your Own Car Insurance Company

If you decide to sue your car insurance company because your claim is not settled, you should not try to take care of the case on your own without the help of an experienced attorney.

Lawsuits regarding a bad faith failure of your insurance provider to settle a claim can be very complicated and require familiarity with the legal process in general.

If you think you have a legitimate claim against your car insurance company, it is a good idea to speak with an attorney quickly about your case so that the statute of limitations does not expire for your claim.

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