Yes, you can sue a health insurance company for negligence. However, it is important to note that these lawsuits can be complex and difficult to win.
In order to succeed, you will need to prove that the insurance company owed you a duty of care, breached that duty, and that their breach caused you to suffer damages.
Elements of Negligence in Health Insurance Cases
To prove negligence in a health insurance case, you need to establish four elements:
- Duty of care: This means that the insurance company had a legal obligation to act in a certain way towards you, such as providing coverage, paying claims, or defending lawsuits. The duty of care is usually implied by the terms of your insurance policy and the laws governing insurance contracts.
- Breach of duty: This means that the insurance company failed to meet its duty of care by acting unreasonably or improperly. For example, the insurance company may have denied your claim without a valid reason, underpaid your claim, or delayed in processing your claim.
- Causation: This means that the insurance company’s breach of duty caused you to suffer harm or loss. For example, you may have incurred medical expenses, lost income, or experienced pain and suffering because of the insurance company’s negligence.
- Damages: This means that you can quantify the harm or loss that you suffered because of the insurance company’s negligence. For example, you may have receipts, bills, invoices, or medical records that show how much money you spent or lost because of the insurance company’s negligence.
Types of Health Insurance Company Negligence
There are different types of health insurance company negligence that can affect your coverage, claims, or lawsuits. Some common examples are:
- Denying coverage: This means that the insurance company refuses to provide coverage for a medical service or treatment that is covered by your policy. For example, the insurance company may deny coverage for surgery, a prescription drug, or a preventive care service that is medically necessary and recommended by your doctor.
- Underpaying claims: This means that the insurance company pays less than what your claim is worth or what your policy entitles you to. For example, the insurance company may pay only a fraction of your medical bills, apply unreasonable deductibles or co-payments, or use outdated or inaccurate fee schedules.
- Extreme denials of insurance: This means that the insurance company cancels your policy, rescinds your policy, or refuses to renew your policy without a valid reason. For example, the insurance company may cancel your policy because you made a claim, rescind your policy because you made a mistake on your application form, or refuse to renew your policy because you have a pre-existing condition.
Legal Options for Dealing with Health Insurance Company Negligence
If you believe that your health insurance company has been negligent in handling your coverage, claims, or lawsuits, you have several legal options to pursue:
- Internal review process: The insurance company may reassess your case at your request. You must respect policy and legal deadlines. You may need more proof to prove your case. The insurance company may uphold, amend, or revoke its judgment after examining your case.
- External review process: This means that you can request an independent third party to review your case and make a binding decision. You can only request an external review after exhausting the internal review process. You need to follow the procedures and deadlines specified by your policy and the law. You may need to pay a fee to request an external review. The external reviewer may uphold, modify, or reverse the insurance company’s decision after reviewing your case.
- Bringing a lawsuit against the company: This means that you can file a lawsuit against the insurance company in court and seek compensation for your damages. You can only bring a lawsuit after exhausting the internal and external review processes. You need to follow the rules and deadlines specified by the law. You may need to hire a lawyer to represent you in court. The court may award you compensatory damages and/or punitive damages after hearing your case.
Suing for Bad Faith Practices
In some cases, you may be able to sue your health insurance company for bad faith practices in addition to negligence. Bad faith practices are actions that show that the insurance company acted dishonestly, unfairly, or maliciously in dealing with your case. Bad faith practices can result in additional damages and penalties for the insurance company.
Understanding the Bad Faith Law
The bad faith law is a set of rules and principles that govern how insurance companies should behave toward their policyholders. The bad faith law is based on the implied covenant of good faith and fair dealing, which means that the insurance company should act in good faith and deal fairly with its policyholders. The bad faith law can vary by state, but it generally prohibits insurance companies from engaging in unreasonable or egregious conduct that violates their duties to their policyholders.
Acts Considered as Bad Faith by Insurance Companies
There are many acts that can be considered as bad faith by insurance companies, depending on the circumstances and the evidence. Some common examples are:
- Failing to investigate a claim properly: This means that the insurance company does not conduct a thorough, timely, or impartial investigation of your claim. For example, the insurance company may ignore or misinterpret your evidence, fail to interview witnesses, or use biased experts.
- Refusing to defend a lawsuit: This means that the insurance company does not provide you with legal representation or assistance when you are sued by a third party for a covered claim. For example, the insurance company may refuse to hire a lawyer for you, refuse to pay for your legal fees, or refuse to cooperate with your lawyer.
- Threatening or coercing a policyholder: This means that the insurance company uses intimidation or pressure tactics to influence your decision or action. For example, the insurance company may threaten to cancel your policy, increase your premium, or report you to the authorities if you do not accept a low settlement offer or drop a claim.
- Refusing to make a reasonable settlement offer: This means that the insurance company does not offer to pay a fair amount of money to resolve your claim or lawsuit. For example, the insurance company may offer to pay much less than what your claim is worth, what your policy covers, or what the evidence supports.
- Making unreasonable interpretations of an insurance policy: This means that the insurance company applies an unfair or inaccurate meaning to the terms or conditions of your policy. For example, the insurance company may use ambiguous language, outdated definitions, or contradictory clauses to deny or limit your coverage.
Requirements for Filing a Bad Faith Insurance Lawsuit
To file a bad faith insurance lawsuit against your health insurance company, you need to meet certain requirements:
- You must have a valid insurance policy: This means that you must have a legally binding contract with the insurance company that covers your claim or lawsuit. You must also have paid your premiums and complied with your obligations under the policy.
- You must have suffered damages because of the insurance company’s bad faith: This means that you must have incurred financial losses, physical injuries, emotional distress, or other harms because of the insurance company’s bad faith practices. You must also be able to prove the amount and extent of your damages.
- You must have exhausted other remedies before suing: This means that you must have tried to resolve your dispute with the insurance company through other means before filing a lawsuit. You must have gone through the internal and external review processes and received a final decision from the insurance company or the external reviewer.
Potential Compensation for a Successful Case
If you win a bad faith insurance lawsuit against your health insurance company, you may be able to recover various types of compensation, such as:
- Compensatory damages: These are damages that are intended to compensate you for your actual losses and harms caused by the insurance company’s bad faith. Compensatory damages may include medical expenses, lost income, pain and suffering, and other economic and non-economic damages.
- Punitive damages: These are damages that are intended to punish the insurance company for its bad faith and deter it from engaging in similar conduct in the future. Punitive damages are awarded in addition to compensatory damages and are usually based on the degree of malice or recklessness shown by the insurance company. Punitive damages are not available in all states and may be subject to limits or caps.
- Attorneys’ fees and costs: These are expenses that you incur in pursuing your bad faith insurance lawsuit. Attorneys’ fees and costs may include legal fees, court fees, filing fees, expert fees, and other litigation expenses. You may be able to recover these expenses from the insurance company if you win your case or if there is a statute or contract that allows you to do so.