Considerations When Suing an Insurance Company


Suing an insurance company is something that happens frequently in the United States, but there are a number of general questions that need to be thought out by lawyers before bringing such a lawsuit. 

•Have you done everything you can to avoid filing the lawsuit?

•Have you submitted additional information to the insurance company if you understand what it is they are objecting to?

•Have you taken the opportunity to try to persuade them to change their mind without the lawsuit?

•Did you get the tools you needed to do that?

Quite often, in my experience, an experienced lawyer can resolve claims or disputes with insurance companies without the need for a lawsuit; if they know what buttons to push, what information needs to be provided, and understand why the insurance company has difficulty either paying the claim or paying you, the amount, the client you should be paid.

Once the lawyer reaches the point where litigation is a necessity, then she needs to consider a number of different things before actually filing the lawsuit.

Check Out the Client Before Filing the Action

Make sure you have checked out your own client before filing the action. There are many online tools available to research your client, whether an individual or business, to discover whether or not you’ll have a problem or issue.

For example, if you’re suing on behalf of a client that has a corporation, it’s very easy to go online to verify that, in every state, the corporation is an active corporation that’s in good standing, that the name filed under is proper, and things of that nature. When it comes to businesses or individuals, there’s often a lot of information available through online searches. Whether searching on Google or social media, it is better for you to know in advance what is out there, good and bad, before you start the action. If those are things that you need to address with your client, then do it.

In Which Court Will You File the Lawsuit?

If the lawsuit involves more than $75,000 that is owed to your client, you may have the option to bring the case in Federal Court rather than State Court. Typically, insurance companies prefer litigating in Federal Court rather than State Court. Depending on which state you’re in, you might also want to be in Federal Court, depending on a number of issues.

Many lawyers bringing cases against insurance companies want to bring them into State Court. They think they’re going to perhaps get a better jury or that the rules in that particular state are more favorable than the Federal Court rules. That may also not be the case, depending on the state you’re in. You really have to know the rules for both courts and determine whether the case can be brought in either.

Sometimes, the defending insurance company can still take you to Federal Court whether you want to be there or not. If this is the case, knowing that insurance companies would rather be in Federal Court than State Court, you may want to save yourself the time and energy, in certain circumstances, and just bring it in Federal Court. Other issues include: 

•Is there a particular county or area where you can bring the case? Is there more than one?

•What kind of judges do you get in that particular courthouse?

•What kind of juries do you get in that particular courthouse?

These are some points to consider, right out of the box, before you even get into what claims can be brought against the insurance company.


Evan S. Schwartz
Founder of Schwartz, Conroy & Hack