What Are My Legal Options in an Insurance Coverage Dispute in New York?

Insurance coverage disputes can come up for a variety of reasons, and when they arise, resolving the issue fairly often depends on how well you understand the law. Here’s some advice from an insurance attorney in Glen Cove, NY, on the legal options for pursuing a resolution.

What Are My Legal Options in an Insurance Coverage Dispute in New York? Advice from an Insurance Attorney in Glen Cove, NY

Before taking any legal steps, carefully review your policy, including the declarations page, exclusions, and conditions. You need to determine whether the insurer has wrongfully denied coverage according to the policy or is basing denial of coverage on a clause that you understand to mean something else.

File an Internal Appeal with the Insurance Company

Most insurance companies have a process in place for handling disputes or reconsidering denied claims. When you file an appeal, you are essentially asking the company to take a second look at their decision and re-evaluate the evidence or documentation related to your claim. This process usually requires submitting additional information or clarification, such as medical records, repair estimates, or other proof to support your position.

File a Complaint with the New York Department of Financial Services (DFS)

If your internal appeal with the insurance company does not resolve the dispute, you can file a formal complaint with the New York Department of Financial Services (DFS). The DFS oversees insurance companies and ensures that they comply with state laws. By submitting a complaint, you are asking the DFS to investigate the insurance company’s actions and determine whether they violated any state regulations.

The DFS will review the details of your dispute and can provide mediation services, help resolve issues, or, in some cases, initiate enforcement actions against the insurer. Filing a complaint does not guarantee that your claim will be paid, but it does add a layer of oversight and accountability that could make a difference.

Consider Alternative Dispute Resolution (ADR)

Mediation and arbitration are two common ADR methods that can help settle insurance disputes quickly and efficiently. In mediation, a neutral third party helps both you and the insurance company come to a mutually agreeable solution. In arbitration, your case is presented to an arbitrator, who considers the evidence and then makes a binding decision. (Check your policy to see if there is a mandatory arbitration clause; if there is, then you are actually required to settle disputes through arbitration rather than going to court.)

File a Lawsuit for Breach of Contract

If your insurance company refuses to pay your claim or disputes your coverage, you may need to file a lawsuit for breach of contract. In this type of lawsuit, you are alleging that the insurance company failed to honor its obligations under the policy. Under New York law, policyholders can seek damages, including the full value of the claim, interest, and legal fees. To succeed in a breach of contract claim, you will need to give evidence that the insurer wrongfully denied your claim or failed to fulfill their contractual duties.

Pursue a Bad Faith Insurance Claim

New York law allows policyholders to sue for bad faith when the insurance company acts unfairly, such as by misrepresenting policy terms, failing to investigate claims properly, or unreasonably delaying payment. “Bad faith” means the insurer intentionally delays or denies a legitimate claim without a reasonable basis.

If you’re dealing with an insurance dispute, don’t hesitate to contact Chiariello & Chiariello in Glen Cove, NY. We can help with each step of this process and be your advocate against an insurer.

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