Do I Have to Pay Legal Fees if I Lose My Insurance Claim Lawsuit?

by / ⠀Blog / August 29, 2022
legal fees insurance claim lawsuit

Insurance is an important part of people’s lives since almost every person has at least one type of insurance to help them in a time of crisis. However, not all insurance providers are trustworthy. Individuals can end up asking themselves if they have to pay legal fees. If they are unfortunate enough to end up working with a dishonest insurance company, people can end up in lawsuits fighting for their right to proper compensation.

States have different laws to provide cover for the insurance company and the insured. There are situations when one party breaks the contract, and legal steps are needed to solve the issue. Most contract breaches end up in court. This is when insurance lawyers take the reins to help their clients receive the compensation they deserve. You can read all about it here.

Many people avoid going to court against an insurance company because they fear the potential fees. Despite the general belief that insurance companies are too big with too many lawyers to fight, this is not true. It should not discourage people from fighting back.

Knowing all the grey areas an insurance company is working in is important to increase the chances of winning.

If you choose the right lawyers to represent you, the chance of winning is greater since failed lawsuits are usually rare when it comes to insurance claims. In many situations, law firms offer free consultations before taking your case. Here, you can view more information. This is so that they can brief you on how strong your claim is. Below is a detailing of this aspect to better understand the insured’s situation. Additionally, if they need to pay fees in the unfortunate situation that they lose a lawsuit.

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Attorney Fees

In most situations, even if the insured lost the lawsuit, they don’t have to pay attorney fees. However, this depends on the state in which the lawsuit occurs. For example, in the state of Florida, the Florida Statutes Sec. 627.428, states that attorney fees are part of the judgment process. The meaning of this law is that people do not have to pay the representative attorney of the insurance company if they lose the lawsuit. But, they need to pay their attorney.

Types of Claims

There are many types of insurance claims and lawsuits that differ from case to case. In some situations, when the insured is at fault and they sue the company, they may pay specific fees. For example, if the insured was in a car crash and they were drunk but their insurance company does not want to pay, the driver can sue them. In this situation, the insured broke the contract, and the insurance company does not have to pay for the repairs and can end up winning the lawsuit.

With the help of an insurance lawyer, the insured might still get a settlement and avoid paying high fees to the insurance company. In some states, since the laws are different, they may need to pay attorney fees for the insurance company as well. It is necessary to check the law and talk with a lawyer before filing a lawsuit.

Car accident lawsuits can get messy, especially if the crash wasn’t your fault and you’ve been injured. If you’re not sure when to get a car accident attorney, it’s in your best interest to seek help from experienced lawyers as soon as possible so you can focus on your health and recovery while pursuing your legal rights.

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If you lose the lawsuit, part of the legal fees owed to attorneys needs to be paid, at least for the attorney representing the insured. Not only are the attorney’s wages part of the legal fees, but a lawsuit also starts with consulting the lawyer. So the insured must pay consultation fees in some cases. However, they only pay the contingency fee if they win the lawsuit.

So, if you lose the lawsuit there will be no need to pay the lawyer, you only need to pay for lesser expenses. Another significant fee is the statutory fee. The court decides it, and the insured has to pay the lawyer the agreed-upon fee.

Other Fees

When it comes to fees during an insurance lawsuit, there are many types, especially regarding lawyers representing both parties. It is also important to understand that there are two major types of fees during a lawsuit. These include attorney fees and case costs. The attorney fees are the attorney’s wages.

On the other hand, case costs include more types of legal fees that you need to pay whether you win or lose the case. The insured must pay these case costs throughout the case, so it is not possible to avoid them. Some of these costs are bails and bonds, court filing fees, and even fees for postage or photocopying documents.

If you agree to a settlement, you can get some money back for the case costs. Unfortunately, in most situations, you will still have to pay the case cost fees. This is no matter the result of the lawsuit.

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The American Rule and Exceptions

The American rule states that both parties must pay for their representation regardless of whether they win or lose. The state created this rule to help people seek justice without fear of losing the lawsuit and needing to pay both attorneys.

As with most rules, there are exceptions when one of the parties needs to pay both legal fees. For example, one situation is when one of the parties does not take the situation seriously and wastes the time of all involved. This also stands true if the lawsuit isn’t conducted professionally or when a party appeals a failed lawsuit or case.

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