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How Do Insurance Disputes Work? How Does Litigation Work and What Does it Cost?

When an insurance dispute can’t be resolved through the insurance company’s internal grievance or appeals process, it might become necessary to file a lawsuit. You may be wondering how much it costs to file a lawsuit and whether you can afford it. Below is a look at the steps involved in litigating an insurance dispute and the related costs. You needn’t worry about these costs, though, because they will be handled by your law firm who takes your case on a contingency basis. You won’t pay any expenses out of pocket to litigate your case. Court costs and attorney’s fees can often be recovered from the other party or deducted from the amount your lawyer recovers for you. If you ultimately win nothing at trial, then you will likely owe either nothing or only a small amount for operational costs.

Filing Fees

There are basic costs necessary for filing any lawsuit in court. Filing fees in federal court are currently $402 ($350.00 plus $52.00 Administrative Fee). If your policy is governed by California law, rather than by the federal Employee Retirement Income Security Act (ERISA), then you will likely file your case in California state court.

In the County of Los Angeles, the fee for filing a civil complaint is $435. Most motions cost around $60 to file (less in other jurisdictions), while a motion for summary adjudication of your case will cost $500. There are various nominal fees for other types of court filings as well.

Litigation Costs: Experts, Discovery

In addition to filing fees, your case will involve “discovery.” Discovery is the process of gathering and exchanging evidence with the other party. Discovery costs include obtaining and scanning documents, obtaining copies of documents from healthcare companies and other institutions, and sending digital and/or hard copies of documents to the other party. Depending on the complexity of the case, discovery costs can range from hundreds to thousands of dollars.

Additionally, if your case is especially complex, you might need to retain the service of experts. For example, if the actual cause of death is disputed and is relevant to your claim, you might need a physician qualified to testify as to the cause of death. Expert witnesses typically charge several hundred dollars an hour and will be required to prepare opinions, sit through depositions, and potentially testify in court. The longer your case goes, and in particular, if it goes all the way to trial, the higher the cost will be.

If your case instead turns only on the interpretation of policy language and facts like whether you were notified of a potential policy lapse, the case is likely to resolve sooner and is less likely to require expert testimony.

In a Bad Faith Case, You Can Recover Attorney Fees

Under California law, you may be able to recover your litigation costs from the other party should you prevail in your life insurance dispute. If you are filing a bad faith claim against your insurance company–asserting that they wrongfully denied your claim, intentionally misrepresented your policy, failed to timely and thoroughly investigate your claim, etc.–then you can seek to obtain attorney’s fees in addition to the value of your claim. The insurance company will be forced to compensate you for the amount you had to spend to obtain the policy benefits to which you were entitled. Attorney’s fees will be awarded in addition to the value of your claim, and separate from any punitive damages or other damages awarded.

Gianelli & Morris is Ready to Fight for Your Right to Life Insurance Benefits

If you are a California life insurance policyholder or beneficiary and you have faced a wrongful claim denial or bad faith conduct by an insurance company, call the insurance law attorneys Gianelli & Morris for a free consultation. We advance the costs of litigation and only charge a fee if we are successful in your case.

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