Article Source: Coker Law Trial Attorneys, FL
Yes, in some cases, you can sue for emotional distress caused by an insurance company’s denial, especially if the denial was made in bad faith. These cases aren’t easy to win, but they do happen, and courts have recognized the harm that can come from unfair claim handling.
In this article, we’ll break down what emotional distress means in legal terms, when it applies to insurance claims, and what steps to take if you believe your insurer crossed the line. We’ll also explain what courts look for in these types of cases and how damages are calculated.
If you’re wondering how to sue an insurance company, speak with a lawyer.
When Emotional Distress Becomes a Legal Issue
Insurance companies have a legal duty to act in good faith when handling claims. That means they must investigate claims properly, communicate clearly, and make timely decisions based on the policy terms. When an insurer fails to do this, and that failure causes serious emotional or psychological harm, it can open the door to legal consequences.
Not every denial leads to a lawsuit, but when the denial is unreasonable or malicious, it may cross the line into what courts recognize as “bad faith.” In these cases, emotional distress can become a valid part of the damages a person seeks.
What Counts as Emotional Distress?
In legal terms, emotional distress refers to mental suffering that goes beyond ordinary frustration or disappointment. It might include:
- Anxiety or panic attacks
- Depression triggered or worsened by the denial
- Sleep problems or chronic stress
- Physical symptoms caused by emotional strain
To prove emotional distress in court, you’ll usually need medical records, therapy notes, or expert testimony that ties the mental suffering to the insurer’s actions.
Understanding Bad Faith Insurance Denials
Bad faith occurs when an insurance company unreasonably refuses to pay a valid claim or mishandles the claim process. This could include:
- Denying a claim without a proper investigation
- Delaying payment for no clear reason
- Misrepresenting the policy coverage
- Pressuring the policyholder to settle for less
California, for example, has strong protections under the Unfair Insurance Practices Act (Cal. Ins. Code § 790.03(h)), which outlines various bad faith tactics. Other states have similar statutes or allow common law claims for bad faith.
If the denial of your claim involved any of these tactics, and it led to significant emotional harm, a lawsuit may be justified.
Legal Grounds for Suing for Emotional Distress
There are typically two legal paths for emotional distress claims:
1. Negligent Infliction of Emotional Distress (NIED)
This applies when the insurer’s careless behavior leads to mental suffering. It’s not enough that the company was wrong—you have to show their actions were unreasonable and caused genuine harm.
2. Intentional Infliction of Emotional Distress (IIED)
This is a higher bar to clear. It requires proof that the insurer acted outrageously or recklessly, knowing their actions would likely cause emotional trauma.
In both cases, courts look for proof that the emotional distress is severe and directly linked to the insurer’s conduct.
Proving Emotional Harm in Court
To build a solid case, you’ll need more than your own testimony. Here’s what helps:
- Medical documentation: Diagnoses, treatment notes, and prescriptions from mental health professionals.
- Witness statements: Family, friends, or coworkers who observed changes in your behavior or mood.
- Timeline evidence: Records showing how your mental health declined after the insurance denial.
In some cases, plaintiffs also hire mental health experts to testify about the emotional impact and whether it aligns with the facts of the case.
What You Can Recover
If your lawsuit is successful, you may be able to recover damages for:
- Medical bills related to emotional distress treatment
- Lost income if your condition affected your ability to work
- Pain and suffering tied to mental anguish
- Punitive damages in extreme bad faith cases
Punitive damages are meant to punish the insurer for outrageous behavior and discourage future misconduct. Not every case qualifies, but they can significantly increase the value of a claim.
Final Thoughts
Filing a lawsuit for emotional distress caused by an insurance denial is possible, but it’s rarely straightforward. Courts are cautious when it comes to these claims, and emotional harm must be clearly tied to the insurer’s wrongful actions. Understanding your rights and gathering the right evidence is critical if you’re considering legal action.
