An insurance claim is a formal request to an insurance company for benefits under an insurance policy. These benefits can include monetary payments for a covered loss, such as damaged property or medical bills. It can also include legal representation if the insured is sued.
What Obligations Does an Insurance Company Have?
An insurance policy is a contract between an insurer and its policyholder. In return for the policyholder paying a premium and meeting certain conditions, the insurer promises to provide certain benefits to the insured unless a specific exception applies.
Under California law, both the policyholder and insurance company have a duty to act in “good faith” when acting through the insurance policy. For example, the policyholder has a duty to pay premiums on time and not to file fraudulent claims. The insurance company has a duty not to unreasonably delay payments or make their policyholders jump through hoops to receive insurance benefits. The insurance company may also be obligated to:
- Pay out legitimate claims unless the insurance company has a reasonable reason to believe it’s not a covered loss, the policyholder hasn’t met a required condition, or a policy exception applies.
- Provide a legal defense against third-party liability claims.
- Conduct a reasonable investigation into the claim, including making a coverage determination and identifying who is liable for the loss.
- Make good-faith attempts to settle any insurance or legal claims against the insured.
What Can I Recover With an Insurance Claim?
What you can recover depends on the type of policy and insurance company you’re filing a claim with. In most personal injury cases, an insurance claim may include payment for one or more of the following:
- Medical expenses
- Lost income
- Lost earning capacity
- Cost of living expenses now incurred as a result of the injury
- Property repair or replacement costs
- Emotional distress
- Pain and suffering
What’s the Difference Between a Lawsuit and an Insurance Claim?
An insurance claim is a request for policy benefits, while a lawsuit is a civil legal proceeding where one party tries to seek legal relief from another party. This sounds simple enough, but given how insurance policies often work, things can get confusing quickly, especially with third-party insurance claims. To help demonstrate the differences, let’s look at a hypothetical car crash.
You’re driving down the California coast when someone runs a red light and collides with your vehicle. The other driver is 100% at fault for the accident, and there’s no disagreement about this. You’re injured in the accident, and your car is badly damaged.
If you want to seek compensation for your injuries and vehicle repair costs, you’ll probably start with filing an insurance claim. You can file this claim with either your car insurance policy or the other driver’s policy.
If you receive payment under an insurance claim, you’re receiving money that the insurance company is contractually required to pay under the insurance policy. But let’s say the insurance company denies your claim, doesn’t pay you anywhere near enough to fully compensate you for your loss, or you and the other driver both lack car insurance. You have the option to file a lawsuit against the other driver.
To do this, you’ll file what’s called a Complaint in civil court. This court filing outlines who you are (the plaintiff), who the defendant is (the at-fault driver), what legal relief you’re seeking, and the legal and factual basis or justification for receiving that relief. The defendant then has an opportunity to respond to your allegations.
The next step in the lawsuit process is discovery, where you and the defendant exchange information about the accident and each other’s legal cases. After discovery is complete, there’s a trial. After the trial, either side may have the option of filing an appeal if they disagree with the trial’s outcome. If you win your case, any money you receive comes directly from the defendant.
The reason why things can get confusing is because in most lawsuits like the one described, the defendant will have a car insurance policy in effect that pays out if the insured is found to be at fault in a car accident court case. This policy will also usually provide legal representation from a civil suit as part of the policy’s benefits.
So in reality, whether it’s with an insurance claim or a legal judgment, the money the at-fault party has to pay comes from their insurance company.
Should I Hire an Attorney To File an Insurance Claim?
For most insurance claims, you shouldn’t have to hire an attorney. However, you should at least speak with a lawyer if the incident giving rise to the claim:
- Resulted in someone dying.
- Involves a large amount of money.
- Has one or more defendants that’s a government entity or major business.
- Led to you suffering serious injuries.
- Has two or more potential at-fault parties and potential plaintiffs.
- Results in you having to sign a waiver or other legal document limiting your legal rights as a condition of receiving an insurance claim payout.
- Has the insurance company low-balling you with their insurance settlement offer.
By hiring an attorney to handle your insurance claim, such as one from Maison Law, you’ll receive the following benefits:
- Help negotiating with insurance company adjusters and lawyers.
- Help conducting investigations into the incident giving rise to the insurance claim.
- Identifying potentially liable parties that may be possible defendants in a future lawsuit.
- Having a lawyer who’s familiar with your case and has everything they need to file the Complaint should settlement talks fail.
- Providing you with peace of mind knowing everything that can be done for your insurance claim is being done and that someone will identify and take care of any policy or legal requirements.
Talk to a Personal Injury Insurance Claim Attorney
If you’ve been injured or suffered a covered loss and are having trouble getting compensation from an insurance company, Maison Law can help. We not only know what it takes to successfully negotiate with insurance companies, but have the skills and experience to escalate a claim to the courtroom with a lawsuit should settlement talks break down.
Depending on the timeline of your situation, you may need to act quickly, as missing a deadline could limit your recovery rights. Contact us today to schedule a free consultation and case evaluation. You don’t pay us anything unless we first recover money for you.
