What to Expect When Your Insurance Claim Ends up in Federal Court

When you need to file an insurance claim, a public adjuster is one of your best allies and they can be your greatest advocate. A study showed that there was a 747 percent increase in insurance payouts when someone hired a public adjuster to help negotiate their claim.

There are some cases though, where in order to help you collect the maximum amount your insurance company owes you, where a public adjuster and a lawyer need to work together to take your claim to court. Most of the time, the case can be settled without going to trial, but there is always that stubborn exception that will not budge on their offer. If your insurance claim has escalated to this point, you will need to be prepared to defend your claim in front of a jury.

I Filed in State Court, Why is it Now in Federal?

Even if you file your case with a state court, your insurance company still may choose to request the case is seen by a federal court instead. There are several reasons the insurance company may wish to do this: “First, federal courts often have greater resources to move a case to completion. For example, most federal judges have a full staff of law clerks—lawyers that help the judge research legal issues, delve into the evidence, and draft opinions. Second, federal courts frequently decide cases without oral argument, relying solely on the litigant’s written work product. Third, the civil procedure rules in federal court are well-established and lead to predictable results on important pretrial issues. Finally, some insurance defense lawyers may think that federal court gives them an advantage to win the case.”

Insurance Companies Responses

When the insurance company receives the formal complaint attached to the lawsuit, they have a few ways to respond to it. The insurance company can answer it and say if the allegations against them are true or false; more often than not, they will say the allegations are false and they did not act wrongfully.

They can file a motion to dismiss the allegations, usually citing that “the complaint failed to state a claim upon which relief can be granted. This motion argues that even when taking the complaint’s allegations as true, the insured did not adequately plead that the insurer violated the policy or the law.”

If your insurance policy has the appraisal or arbitration provision, they can invoke that in response to you filing a suit against them, which will cause the court to stop the proceedings and send the case to a panel to make a decision on what is owed. This is becoming a common provision in insurance policies, so it is a good idea to check and see if yours has this so you will not be blindsided by them invoking it.

Before Trial

Often the court will ask the policyholder’s and insurer’s lawyers to meet one last time before a case goes to trial and try one last time to reach a settlement. If a settlement still cannot be reached, the case will move forward into a trial with a jury; if you reach this point, your attorney and your public adjuster can work together to help prepare you to fight for your claim.