Can I sue my auto insurance company?

You would most likely sue your auto insurance company over a bad faith breach in contract. Due to their expensive and time-consuming nature, 90% are settled out of court. However, it can be difficult to win against an insurance company because they have a lot of money and power behind them.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Jan 13, 2022

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Here's what you need to know...

  • You are allowed to sue your auto insurance company, but you must have a legitimate case
  • It’s a good idea to meet with more than one lawyer before making a final decision
  • If you need to sure your insurance company, you will need to file a civil suit

You can sue your auto insurance company, but you need to be sure that you really have a case. It is hard to win against an insurance company because they have a lot of money and power behind them.

What’s more, when they refuse to pay for an auto insurance claim, they usually have a compelling reason for doing so.

The truth is that because so many people are willing to sue at the drop of a hat, many lawyers have gotten downright picky about the cases they are willing to take.

Despite the reputation that many lawyers have as ambulances chasers, the truth is that most lawyers won’t take any case that they don’t think they can win.

Because of that, if you are considering suing your auto insurance company, you need to have a rock solid case against them. What’s more, in most cases, you will be required to go through some steps before you actually find yourself in court.

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Why would someone sue their auto insurance company?

The most common reason to sue an auto insurance company is if the company refuses to pay part or all of a claim. Typically, this only happens if the insurance company determines that the at-fault party committed fraud or didn’t have adequate insurance to cover damages.

Just because an insurance company makes this determination doesn’t mean that it’s accurate. Insurance companies make mistakes and sometimes it takes a claims lawsuit to fix it.

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What kind of lawyer do I need to sue my insurance company?

When you sue someone, it’s a civil case, so you will need to hire a civil lawyer. What’s more, you are going to want to hire a lawyer who specializes in lawsuits against insurance companies.

You need to know right off the bat that hiring a lawyer isn’t cheap.  If they think that you have a big case for them to win, will charge you a commission on the back end of the case. What this means is that if you win then they get a percentage of your winnings.

The commission to the lawyer for this kind of case will range between 30 percent to up to 60 percent. Much like your auto insurance, you need to shop around for a lawyer.

While you don’t want to go to cheap, you also probably don’t want to pay a lawyer 60 percent of money that you are going to still have to pay taxes on.

On the other side of the coin is a lawyer that charges you by the hour. In this case, the lawyer isn’t likely to wait until the end of the case for their payment. In most cases, you will pay them a retainer, which can range from $500 to thousands of dollars.

When choosing a lawyer, you need to feel comfortable with them. If the lawyer you are talking to makes you feel uncomfortable, seems iffy or doesn’t seem interested in your case personally, then it’s time to move on to the next one. Most lawyers will give you an initial consolation for free.

What if I can’t afford to hire a lawyer, what are my other options?

Another option for someone who can’t afford to hire a lawyer is to talk to someone in law school. While this isn’t the perfect choice, law students are often hired to work on cases, especially when they are in their last year of law school.

You could also consider talking to a lawyer and offering to pay them for specific duties, such as filing the right paperwork and writing letter. This is a great tactic if you are trying to avoid going to court at all.

Although auto insurance companies aren’t the big bad wolf that many lawyers paint them to be, they do have money behind them. If your case gets to courts and you can’t afford an attorney, you aren’t going to have much success.

If at all possible you need to get your case resolved in mediation. This is a path that most insurance companies prefer to take. A professional mediator, who has no connection with your or the insurance company, will try to help the two of you to resolve your case without going to court.

To put it simply, you state your case and the resolution that you want and the insurance company does the same. The mediator then tries to create a deal that gets both of you to an acceptable middle ground.

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