TL;DR: How to sue an insurance company after an auto accident depends on which company you mean. In most cases, you sue the at-fault driver, not their insurer directly. The main exceptions are your own uninsured/underinsured motorist claim or a bad-faith claim over how an insurer handled a valid claim. This guide covers when a direct suit against an insurer applies and the steps to take before filing one.
How to sue an insurance company after an auto accident depends on which company you’re talking about. In most cases, you sue the at-fault driver, and their insurer defends the case and pays any judgment — you don’t sue that insurer directly. The exception is your own insurance company, which you can sue directly for uninsured/underinsured motorist benefits or for handling your claim in bad faith.
Texas and Tennessee both have statutes that penalize insurers for unreasonable delay or denial. This post covers when you can sue an insurer directly and the steps to take before you do. If negotiations under the ordinary auto accident claims process break down entirely, the next step is usually an auto accident lawsuit against the at-fault driver instead.
The Legal Process: How to Sue an Insurance Company After an Auto Accident
In most car accident cases, you technically sue the at-fault driver, not their insurance company directly — the insurer defends and pays the judgment. The exception is suing your own uninsured/underinsured motorist carrier, or bringing a bad-faith claim against an insurer that unreasonably denied or delayed a valid claim.
That distinction matters because most auto accident lawsuits name the driver as the defendant, not the insurance company. Insurance policies are contracts between an insurer and its own policyholder — you generally don’t have a direct legal relationship with the other driver’s insurer that lets you sue them over the accident itself.
Two situations change that. First, your own policy is a direct contract, so if your insurer refuses to pay a valid uninsured or underinsured motorist claim, you can sue them directly for breach of contract. Second, both Texas and Tennessee allow a separate bad-faith claim against an insurer when the insurer’s handling of the claim itself, not just the underlying accident, was unreasonable.
When You Can Sue Your Own Insurance Company Directly
Two paths lead to actually naming an insurance company as the defendant in a lawsuit, rather than the at-fault driver.
An uninsured/underinsured motorist (UM/UIM) claim arises when the at-fault driver has no insurance, or not enough coverage to pay for your damages. Because UM/UIM coverage is part of your own policy, a dispute over that coverage is a direct breach-of-contract claim against your insurer.
A bad-faith claim arises when an insurer, yours or the other driver’s, handles a valid claim unreasonably: misrepresenting the policy, failing to investigate promptly, or refusing to pay without a reasonable basis. In Texas, this can trigger liability under Insurance Code Chapters 541 and 542, the state’s unfair claim settlement practices and prompt payment statutes. In Tennessee, an insurer that refuses to pay a valid claim in bad faith after a formal written demand can face an additional penalty under Tennessee Code Annotated § 56-7-105.
Neither path is about re-litigating who caused the crash. Both are about how the insurance company behaved once a valid claim was in front of them.
Steps to Take Before You Sue an Insurance Company
Before filing suit against an insurer, a few steps put you in a stronger position:
- Put everything in writing. Verbal promises from an adjuster don’t hold up — request all coverage decisions and denials in writing.
- Send a formal written demand for payment. Both Texas’s and Tennessee’s insurer-penalty statutes require this step before certain remedies become available.
- Document the timeline. Note every date: when you filed the claim, when documentation was submitted, and when, or if, the insurer responded.
- Request the claim file. Ask the insurer for the file showing how they evaluated your claim and calculated any offer.
- Get a case evaluation before filing. A car accident lawyer can tell you whether your situation is a straightforward claims dispute or a genuine bad-faith case, since the two are treated very differently in court.
Skipping the formal demand step is one of the most common mistakes people make. Both states’ penalty statutes are triggered by that written demand, and filing suit before sending one can weaken an otherwise strong case.
This content is for informational purposes only and does not constitute legal advice. Contact Culpepper Law Group for guidance specific to your situation.
The Bottom Line: Suing an Insurance Company After an Auto Accident
Suing an insurance company after an auto accident almost always means one of two things: a direct dispute over your own uninsured/underinsured motorist coverage, or a bad-faith claim over how an insurer handled a valid claim. As LaShundra Culpepper puts it: “People come to us wanting to sue ‘the insurance company,’ and once we sort out which claim they actually have, the path forward gets a lot clearer.” Understanding which situation applies to you is the first step toward deciding whether an auto accident lawsuit is the right move.
Take This Step: Get Help From a Stafford or Memphis Auto Accident Lawyer
Feeling stonewalled by an insurance company after a crash is exhausting, especially when you’re not sure whether you have a valid claim against them directly. Culpepper Law Group offers a free consultation for auto accident victims throughout Stafford, Sugar Land, Missouri City, Richmond, Rosenberg, Katy, and Memphis. A personal injury lawyer on our team can review your claim, identify whether you have a bad-faith or UM/UIM case, and you pay nothing unless we win. Reach out today.
Frequently Asked Questions: Suing an Insurance Company
Can I sue the other driver’s insurance company directly?
Generally, no. You sue the at-fault driver, and their insurance company defends the claim and pays the judgment. A few exceptions exist, mainly involving your own policy or a bad-faith claim.
What does it cost to sue an insurance company?
Culpepper Law Group handles these cases on contingency, so there’s no upfront cost. Our fee comes out of your recovery only if we win.
How long does an insurance company have to pay a valid claim?
In Texas, insurers generally must pay a valid claim within 15 business days of receiving the required documentation, or explain the delay in writing. Tennessee requires a formal demand and a 60-day waiting period before certain penalties apply.
What counts as bad faith by an insurance company?
Bad faith generally means unreasonably denying, delaying, or lowballing a valid claim without a legitimate basis, such as misrepresenting policy terms or failing to investigate. A single denial isn’t automatically bad faith; the insurer’s conduct as a whole matters.
Do I need a lawyer to sue an insurance company?
You’re not legally required to have one, but insurers have adjusters and lawyers defending these claims, and bad-faith and UM/UIM cases both involve technical proof requirements that are easy to get wrong without help.
Key Takeaways
- In most cases, you sue the at-fault driver, not their insurance company directly — the insurer defends the case and pays the judgment.
- You can sue your own insurer directly for a valid uninsured/underinsured motorist claim, since that coverage is part of your own contract.
- Texas insurers can face liability under Insurance Code Chapters 541 and 542 for unfair or untimely claims handling.
- Tennessee insurers can face an added penalty under Tennessee Code Annotated § 56-7-105 for refusing to pay a valid claim in bad faith after a formal demand.
- Sending a formal written demand before filing suit is often a legal prerequisite, not just good practice, in both states.
