Dealing with insurance claims can be stressful, even in the best of circumstances. But when an insurance company denies your legitimate claim or drags its feet in processing it, that stress can turn into serious emotional distress. You may wonder if you can take legal action and sue your insurer for intentionally causing mental anguish during the claims process.
The short answer is yes—in some cases, you may be able to sue an insurance provider for emotional distress damages. However, these cases are complex, and meeting the legal standards for emotional distress can be difficult. If you believe an insurer’s actions have caused you compensable mental suffering, it’s important to understand what’s involved before filing a lawsuit.
What Constitutes Emotional Distress?
Emotional distress refers to mental suffering caused by another party’s extreme, reckless, or intentional actions. To have a valid claim, the emotional distress must be severe enough that a reasonable person would be unable to cope with it.
Signs of emotional distress can include:
- Severe depression or anxiety
- Inability to sleep
- Loss of appetite
- Panic attacks
- PTSD
- Thoughts of suicide
Courts typically require evidence that the emotional distress has tangibly impacted your ability to function normally on a day-to-day basis.
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When Can an Insurance Company Be Sued for Emotional Distress?
In most cases, you can only sue an insurer for emotional distress when their conduct is truly egregious and outrageous. If they simply denied your claim incorrectly, that is unlikely to meet the standard for emotional distress damages.
Here are two scenarios where you may have grounds to sue an insurer for the infliction of emotional distress:
1. Bad Faith Claims Handling
If an insurance company actively engages in bad faith tactics to avoid paying your legitimate claim, their misconduct may cause compensable emotional distress.
For example, an insurer may:
- Intentionally drag out the claims process for months, requesting invasive personal records irrelevant to your claim.
- Use aggressive and coercive tactics to pressure you into accepting an unreasonably low settlement.
- Make false accusations of fraud to intimidate you into dropping your rightful claim.
Outrageous bad faith conduct like this could potentially form the basis of an emotional distress claim, provided it meets your state’s legal standards.
2. Intentional Infliction of Emotional Distress
Some states allow claims for intentional infliction of emotional distress (IIED) in cases where someone deliberately engages in extreme behavior specifically to cause mental anguish.
For IIED, the insurer’s actions must have been intended only to cause mental suffering, without any legitimate purpose. While difficult to prove, an IIED claim could apply if an insurer maliciously denied a dying patient’s life-saving treatment, knowing it would inflict anguish.
Overcoming Legal Hurdles to Sue for Emotional Distress
Even with legitimate grounds for emotional distress, legal obstacles can make successfully suing an insurer challenging. Key limitations include:
Physical Manifestation Requirement
Some states require you to show physical symptoms of distress, like ulcers or migraines. But others now only require evidence that emotional distress impaired your normal functioning.
High Standard of Proof
The conduct must be truly “outrageous” and beyond the bounds of decency to warrant emotional distress damages. Meeting this very high standard is difficult.
Dual Claims Requirement
In many states, emotional distress damages are only allowed if you have also suffered direct physical injury or financial loss from the insurer’s actions. For instance, both a wrongful denial of benefits and resulting emotional distress.
Bystander Rules
If the insurer’s conduct was directed at your spouse or other close relative, some states limit your right to make an emotional distress claim. Unless you’re an immediate family member, you may lack “standing.”
Because of these hurdles, these cases can be hard to win without solid evidence and legal representation.
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Key Steps in Filing an Emotional Distress Lawsuit Against an Insurer
If you’ve suffered compensable emotional distress, here is how you go about suing an insurance provider:
1. Gather Evidence of Your Distress
Thoroughly document how the insurer’s conduct has emotionally impacted you. Important evidence can include:
- Medical records from your doctor, therapist, or psychiatrist. These can substantiate mental health diagnoses related to the incident.
- Prescriptions to treat conditions like depression or anxiety caused by claim issues.
- Records from fitness trackers or sleep apps indicate stress-related changes.
- Documentation of physical manifestations of distress (if your state requires it).
2. Prove the Insurer’s Misconduct
Show through documentation that the insurer knowingly engaged in bad faith or extreme behavior specifically calculated to cause distress. Helpful evidence may include:
- Recorded phone calls with agents using aggressive or abusive tactics.
- Written correspondence where the insurer admits to malicious intent or false accusations against you.
- Witness statements from others affected by the same insurer’s egregious conduct.
3. Consult an Attorney
Share your documentation and case details with an experienced attorney. They can assess if you meet the criteria for an emotional distress claim and advise you on the next steps. Pursuing compensation without legal counsel is extremely difficult.
4. Send a Demand Letter to Insurer
Have your attorney send the insurer a formal demand letter detailing their misconduct, the resulting emotional distress it caused you, and the amount of compensation demanded.
This may spur the insurer to negotiate a settlement, which avoids litigation.
5. File Lawsuit
If the insurer refuses to settle, your attorney can file a lawsuit against them alleging intentional or negligent infliction of emotional distress. The case will then proceed through the litigation process.
- You’ll undergo questioning by the insurer’s lawyers during depositions.
- Your attorney will gather further evidence through discovery.
- Expert witnesses may testify at trial about the emotional distress damages.
- Finally, a jury will decide whether to award you compensation if the case isn’t settled beforehand.
Key Takeaways on Suing for Emotional Distress
- You must prove the insurance company’s conduct was truly outrageous and beyond decency. The legal bar is high.
- Strong evidence is crucial, like medical records documenting related mental health conditions.
- Legal limitations make emotional distress claims an uphill battle in many states.
- An experienced attorney is vital to having any chance of successfully suing an insurer.
- You may first demand the insurer settle, but can file a lawsuit if they refuse to negotiate fair compensation.
To Recap
When an insurance company engages in intentional or reckless misconduct that inflicts severe emotional distress, legal options may exist to pursue compensation through an infliction of emotional distress lawsuit. However, these cases face steep legal hurdles. You need strong evidence of outrageous behavior and the resulting distress, as well as knowledgeable legal representation, to successfully sue an insurer. While challenging, in certain situations where an insurer’s actions are particularly egregious, recourse may be available.
FAQs: Suing Insurance Companies for Emotional Distress
What types of insurer misconduct can lead to emotional distress claims?
The main situations are extreme bad faith claim handling tactics, like malicious accusations of fraud, and intentional efforts to inflict distress by denying treatment, knowing it could severely impact mental health.
What states make it easiest to sue for emotional distress?
States like Pennsylvania, Washington, and Tennessee have less restrictive laws and don’t require physical manifestations of distress. New York and others also allow claims without physical symptoms.
What damages can I recover in an emotional distress claim?
You can potentially recover compensation for medical costs, lost wages if unable to work, pain and suffering, and emotional distress. Punitive damages may be awarded also to punish and deter insurers.
Can I sue just for mental anguish over a denied claim?
Most states do not allow emotional distress claims based solely on a wrongful denial of insurance benefits. You typically can only claim emotional distress if the insurer’s conduct was unusually extreme and egregious.
What should I do if an insurer causes me emotional distress?
First, consult an attorney experienced in bad faith cases to discuss your options. If your case meets the standards, send a demand letter and then file a lawsuit if needed. Be sure to thoroughly document your emotional distress and any resulting life impacts.
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