What Happens If You Sue Your Own Insurance Company
Accidents leave more than physical pain. They bring deep frustration when your own insurance company refuses to honor your claim, leaving you to wonder about your legal options.
Understanding what happens if you sue your own insurance company starts with whether the insurer acted in bad faith, such as denying a valid claim or offering far less than your losses deserve. In Pennsylvania, policyholders can take legal action when insurers fail to meet their obligations through unfair denials, payment delays, or low settlement offers.
You may also need to sue your own insurer if your policy includes uninsured or underinsured motorist coverage and the at-fault driver lacks sufficient insurance. Because these cases involve complex steps like discovery, depositions, and possible trial, consult an Allentown Car Accident Lawyer at Munley Law to protect your rights
Contact an Allentown Car Accident Lawyer
Can I Take Legal Action Against My Insurance Company After a Car Accident?
Yes, suing your insurance company after a car accident is possible when bad faith occurs. Pennsylvania law obligates insurers to process claims fairly and without delay. Breaching this obligation, like rejecting your claim without solid reasoning, gives you the right to pursue a lawsuit for damages.
Bad faith occurs when an insurer fails to investigate properly, withholds key policy details, or delays payment without justification. According to the Pennsylvania Code §146.4, insurers must fully disclose policy benefits and provisions relevant to a claim. Failing to do so can become grounds for a lawsuit.
For car accident victims in Allentown, this often comes up when filing under uninsured or underinsured motorist coverage. When your insurer ignores evidence or undervalues your damages, they may be breaking state insurance standards meant to protect you.
Common Reasons for Suing Your Insurance Company
When you purchase car insurance, you enter a binding contract built on mutual good faith, but some insurers break that trust. Common reasons policyholders take legal action include:
- Unfair claim denials: Your insurer refuses to pay for valid medical bills or vehicle damage.
- Delays in claim processing: The company continually requests new paperwork or ignores your communications.
- Lowball settlements: You receive an offer that doesn’t cover your expenses or losses.
- Failure to investigate properly: The insurer dismisses your claim without reviewing available evidence.
- Violation of disclosure laws: The insurer hides or misrepresents your coverage options, violating provisions like those outlined in Pennsylvania’s insurance regulations.
Each of these situations reflects behavior that may qualify as bad faith, allowing you to hold the insurer accountable in court.
Steps to Filing a Lawsuit Against Your Insurer
Suing your insurer is never straightforward, and what happens if you sue your own insurance company often hinges on following each step correctly. Pennsylvania law structures the process to ensure fairness and accountability. Here’s how it typically unfolds:
- Document your communications. Keep records of all correspondence, claim forms, and settlement offers.
- Review your policy. Verify the coverage limits, exclusions, and benefits that apply to your claim.
- Send a demand letter. Your attorney will formally request fair payment, giving the insurer a chance to correct the issue.
- File a complaint. If the insurer refuses to act in good faith, your lawyer will file a civil lawsuit.
- Participate in discovery. This stage includes depositions, document exchanges, and expert evaluations.
- Prepare for trial or settlement. Many bad faith cases settle once insurers realize they may face penalties and public accountability.
Working with an experienced attorney ensures that your case follows state rules and deadlines.
What You May Recover by Suing Your Insurance Company
If your lawsuit proves that your insurer acted in bad faith, you may be entitled to significant compensation. Under Pennsylvania Consolidated Statutes §8371, courts can award interest on your claim amount from the date it was filed, calculated at the prime rate plus 3%. They may also grant punitive damages to penalize reckless or malicious conduct and require the insurer to cover your attorney’s fees and court costs.
Along with these remedies, you could recover the amount originally owed under your policy and additional compensation for emotional distress caused by the insurer’s misconduct.
Contact a Car Accident Lawyer at Munley Law
When your insurer fails to act fairly after a car accident, you don’t have to face them alone. At Munley Law, we help Allentown residents take on insurance companies that violate their trust and legal obligations. Our team can review your policy, determine what happens if you sue your own insurance company in your situation, and pursue the full recovery you deserve.
Call (610) 857-7424 or fill out our online form for a free consultation. We’ve spent decades protecting Pennsylvania drivers from unfair insurance practices.
Marion Munley
Marion Munley is recognized for her compassionate representation of catastrophically injured clients and
her steadfast dedication to them and their families. Her advocacy has produced numerous multimillion-dollar recoveries, including one of the largest trucking accident settlements on record. Marion is Triple Board Certified by the National Board of Trial Advocacy in Civil Trial, Civil Practice, and Truck Law, and since 2023 has been named one of Pennsylvania’s Top 10 Super Lawyers by Super Lawyers.
Posted in Car Accidents.
