Sued by an Insurance Company? What now?
In years past, when an insurance company decided that a disability insurance, life insurance or long-term care claim was not payable, the insurer would send a letter explaining its decision, and then leave it at that. Companies such as Unum Life Insurance Company, The Prudential Insurance Company of America, New York Life Insurance Company, Hartford Life and Accident Insurance Company, Berkshire Life Insurance Company, Guardian Life Insurance Company of America or American General, considered the matter over, unless and until the insured hired an attorney to file a lawsuit, for a claim denied by the insurance company for the promised insurance benefits. Sometimes, the insured did not know to look for a lawyer, could not find a lawyer or decided, for whatever reason, not to sue, and all parties would simply move on.
However, recently, many insurance companies are taking a different, much more aggressive strategy. Donahue & Horrow LLP has noticed that more and more insurance companies are filing lawsuits in Federal Court, for a recission of the policy, after denying their insured’s claim. This approach has many advantages for the insurance company. For example, they get to pick the Court where the lawsuit will be heard and can select a venue they believe is favorable to them. Second, and perhaps most importantly, when the insurance company files a lawsuit seeking a rescission of the policy, it greatly limits the amount of time you, the insured, have to sue the insurance company for any wrongful denial of the insurance claim.
Normally, in California, a policy holder whose insurance claim is denied would have two years to file a lawsuit asserting a claim for bad faith (also known as a breach of implied covenant of good faith and fair dealing) and four years to file a lawsuit asserting a breach of contract claim. That would allow for plenty of time to find an attorney and decide what to do. However, if the insurance company sues you in Federal Court, you only have three weeks to respond. This response must include a counterclaim against the insurance company for breach of contract and, if appropriate, for bad faith. If those claims are not asserted in the filing, they can be lost forever, preventing you from ever receiving the benefits you deserve and paid for, from the insurance company for their wrongful denial.
Obviously, losing the right to countersue the insurance company is part of your worst case scenario. The other possible outcome would be having the Court immediately rule against you (known as a default judgment), which is what will happen if you do not respond in a timely manner. To protect your rights, you should take a few simple steps:
1. DO NOT DELAY
It can be intimidating to be sued but ignoring the lawsuit and hoping it will go away will not work. That is what the insurance company hopes you will do and will make it much easier for the insurance company to get a Court to rule on their lawsuit. With only a very short time frame to respond to the insurance company’s lawsuit, time is of the essence.
2. LOOK FOR AN ATTORNEY WITH SPECIAL EXPERIENCE SUING INSURANCE COMPANIES
The insurance company sued you hoping that you will not be able to find an attorney to sue them back. Our attorneys at Donahue & Horrow LLP have decades of experience suing insurance companies. If Donahue & Horrow LLP is able to take on your case, we will represent you on a contingency fee basis, which means you do not pay any money to our firm directly, but rather our firm will only get paid if we prevail and collect money from the insurance company through a settlement or trial.
3. GATHER YOUR DOCUMENTS
In order for an attorney to help you, they are going to need to understand what your case is about. You can help them by being ready to give them, not only a copy of the lawsuit, but all of your correspondence and communications with the insurance company and any documents that you believe support your claim.
Remember, if you are sued by an insurance company, you must act quickly. The insurance company is counting on you being too disabled, too intimidated, or too distraught to respond. But if you do not respond, you will be letting the insurance company win without a fight. Contact Donahue & Horrow LLP at (877) 664-5407 for a free consultation. Do not delay as the filing of the lawsuit triggers a deadline that must be met immediately or your right to insurance benefits will be lost forever.