Can You Sue an Insurance Company in Washington?

Yes, you can sue an insurance company in Washington when they act in bad faith by unreasonably denying, delaying, or underpaying valid claims, or when they breach their contractual obligations to their policyholders. 

Simply being unhappy with a settlement offer or claim denial doesn’t automatically create grounds for a lawsuit. Still, insurance companies must handle claims fairly and in good faith under Washington law. Washington law provides strong protections for consumers against unfair insurance practices through both bad faith claims and Consumer Protection Act violations.

A Seattle car accident lawyer can help you determine whether an insurance company’s conduct rises to the level of bad faith and guide you through the legal process of holding insurers accountable for unfair claim handling practices.

Washington’s Insurance Bad Faith Law

Washington recognizes both first-party and third-party bad faith claims against insurance companies. First-party bad faith occurs when your own insurance company fails to honor its contractual obligations to you as its policyholder. Third-party bad faith happens when another driver’s insurance company acts unreasonably in handling your claim against their insured.

Under Washington law, insurance companies have a duty to act in good faith and deal fairly with both their own policyholders and third-party claimants. This duty requires insurers to promptly investigate claims, communicate clearly about coverage decisions, and make reasonable settlement offers when liability and damages are clear.

Bad faith can include unreasonably denying valid claims, failing to conduct adequate investigations, misrepresenting policy terms, delaying payments without justification, or offering settlements that are substantially below fair value. These actions can result in additional damages beyond the original claim value.

Common Examples of Insurance Bad Faith

Insurance bad faith can take many forms during personal injury claims, from outright denial of valid claims to more subtle tactics designed to discourage claimants from pursuing fair compensation. Recognizing these practices helps you identify when insurance companies cross the line from legitimate claim handling to bad faith conduct.

Unreasonable claim denials occur when insurance companies reject valid claims without proper investigation or a reasonable basis. This can include denying coverage based on misinterpretation of policy language, ignoring clear evidence of liability, or applying policy exclusions that don’t actually apply to the circumstances.

Bad faith practices include:

• Unreasonably delaying claim investigations or payments
• Failing to communicate claim decisions or status updates
• Misrepresenting policy terms or coverage limitations
• Refusing to pay claims without conducting reasonable investigations
• Making settlement offers far below the actual claim value
• Requiring unnecessary or excessive documentation
• Using delay tactics to pressure claimants into low settlements

Compensation Available From Suing an Insurance Company in Washington

When you successfully prove insurance bad faith in Washington, you can recover damages beyond just the original claim amount. These additional damages are designed to punish insurance companies for their misconduct and compensate you for the harm caused by their bad faith conduct.

Consequential damages can include additional medical expenses incurred due to delayed treatment, lost wages from extended recovery periods, and emotional distress caused by the insurance company’s conduct. You may also recover attorney fees and litigation costs under certain circumstances.

Potential damages in bad faith cases include:

• Original claim amount that should have been paid
• Interest on delayed payments from the date they should have been made
• Consequential damages caused by the delay or denial
• Emotional distress and mental anguish
• Punitive damages for particularly egregious conduct
• Attorney fees and court costs (in some cases)
• Additional living expenses or medical costs incurred due to bad faith

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Washington Consumer Protection Act Claims

In addition to bad faith claims, Washington’s Consumer Protection Act (CPA) provides another avenue for suing insurance companies in Washington that engage in unfair or deceptive practices. The CPA prohibits unfair methods of competition and unfair or deceptive acts in trade or commerce, which includes insurance claim handling.

CPA violations can occur when insurance companies use deceptive advertising, misrepresent policy terms, engage in unfair claim settlement practices, or violate state insurance regulations. These violations can result in treble damages (three times actual damages) and attorney fees for successful claimants.

The CPA’s broad language allows courts to address insurance company misconduct that might not fit traditional bad faith categories but still harms consumers through unfair or deceptive practices. This additional protection strengthens consumers’ ability to hold insurance companies accountable for improper conduct.

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(800) 708-6000

Proving Bad Faith Against Insurance Companies

Successfully proving bad faith requires demonstrating that the insurance company’s conduct was unreasonable under the circumstances and that they knew or should have known their actions were unreasonable. This typically involves showing that no reasonable insurer would have acted the same way in similar circumstances.

Evidence in bad-faith cases often includes claim files, internal insurance company communications, expert testimony about industry standards, and documentation of the insurance company’s investigation and decision-making process. 

You must show that the insurance company’s conduct fell below acceptable industry standards and caused you harm beyond the original claim amount.

When to Consider Legal Action

Not every dispute with an insurance company constitutes bad faith, but certain warning signs indicate you should consider legal consultation. Excessive delays without explanation, unreasonable settlement offers given clear liability and damages, or refusal to communicate about claim status may indicate bad faith conduct.

Consider legal action when insurance companies deny claims without adequate investigation, misrepresent policy terms or coverage, or engage in delay tactics that seem designed to pressure you into accepting inadequate settlements. These practices violate insurance companies’ legal obligations and may justify additional damages beyond your original claim.

Early consultation with an attorney can help distinguish between legitimate claim disputes and bad faith conduct. If the insurers did not play by the rules, you can sue the insurance company in Washington for what they did.

Holding Insurance Companies Accountable

At Phillips Law Firm, we’ve seen how insurance companies sometimes prioritize profits over fair claim handling, leaving accident victims without the compensation they need and are entitled to receive. Our experienced legal team has successfully pursued bad faith claims against insurance companies throughout Washington for over 30 years.

Contact Phillips Law Firm today for a free consultation about potential insurance bad faith claims. We’ll evaluate the insurance company’s conduct in your case, explain your legal rights, and see if you can sue your insurance company in Washington for what you’ve experienced.

Real People. Real Justice. (800) 708-6000