Insurance disputes

Insurance disputes are disagreements between policyholders (e.g. homeowners, auto owners) and insurers over coverage, claim amount, or claim denial. Policyholders file insurance disputes most often due to denied claims, underpayment, or delays; the Insurance Information Institute notes claim denials account for 10–15% of all property insurance complaints.

Insurers must provide written explanations for denying claims per state regulations (e.g. California Insurance Code §10111.2).

Common causes include disagreement over damage assessments in homeowners’ policies, liability determinations in auto claims, and exclusions cited in health plan denials. Policyholders can escalate insurance disputes through appeals, state department of insurance complaints, or litigation; the NAIC recorded over 300,000 consumer inquiries and complaints regarding insurance disputes in 2022, according to YourInsurance.info (Your Insurance Info).

Legal counsel specializing in insurance law (such as Merlin Law Group or Anderson Kill) often represents clients in large-dollar disputes. States mandate mediation or appraisal processes in certain disputes, such as Florida’s Residential Property Mediation Program handling more than 1,800 cases in 2023 alone.

Arbitration may resolve complex commercial insurance disputes faster than court trials; JAMS reported a 30% increase in insurance arbitrations since 2020. Disputes impact credit reports only if unpaid settlements (as with subrogation in auto accidents) go to collections, per Experian data.

Insurance contracts outline strict deadlines for filing disputes (sometimes 60 days post-denial), supported by statutes like Texas Insurance Code §542.056. Unresolved insurance disputes sometimes trigger lawsuits–data from the American Bar Association show that about 7% of all civil cases filed annually involve an insurer as a party.