Can You Sue Your Health Insurance Company?

Facing a denied or delayed medical claim can feel like hitting a wall, especially when your focus should be on recovery. Many people in Albuquerque ask, Can you sue your health insurance company when it seems like the insurer is more interested in protecting profits than honoring the policy you paid for? Yes, you can sue a health insurance company, but the process is not always straightforward. 

In most situations, you’ll need to go through the appeals process first, and only after that step can a lawsuit for breach of contract, negligence, or bad faith come into play. At VandenBout Law, we stand with policyholders who are tired of being mistreated and are ready to fight back.

When Can You Sue a Health Insurance Provider?

Insurance companies are legally required to handle claims fairly, investigate promptly, and pay valid benefits. When they fail to do so, you may have grounds for legal action. In New Mexico, unfair insurance practices are outlined under N.M. Stat. § 59A-16-20. Examples of violations include:

• Misrepresenting facts or policy provisions to policyholders.
• Ignoring or delaying responses to claim-related communications.
• Failing to investigate or process claims on time.
• Denying or not affirming coverage without a reasonable justification.
• Offering substantially less than what is owed, forcing policyholders to file lawsuits to recover the full amount.
• Using altered applications to deny or reduce benefits without the insured’s knowledge or consent.
• Delaying settlement of one portion of a claim to gain leverage over another.
• Providing vague or incomplete explanations for denying a claim.

When these actions occur, it may be possible to sue the insurance provider for bad faith or breach of contract.

Try an Internal Appeal Before Filing a Lawsuit

Even though you may feel frustrated, legal action is rarely the first step. Most policies and state regulations require that you attempt an appeal process before moving forward with a lawsuit. According to the New Mexico Office of Superintendent of Insurance, you can challenge your insurer’s decision through an internal or external review.

Internal and External Review Options

• Internal Review: This is your first chance to ask your insurer to rethink their decision. You might need to send medical records or notes from your doctor. They have to answer pretty quickly, and delays can really mess with your finances. A lot of people struggle with all the paperwork and confusing rules, which is where legal or medical help can really make a difference.
• External Review: If that internal review doesn’t work, you can get an outside opinion. This takes the power out of your insurer’s hands and lets someone else decide if your claim should be approved. These external reviewers are supposed to be unbiased, and their decisions are usually final for the insurer.

Only after completing these steps should you consider legal action, unless the insurer’s conduct is so egregious that immediate intervention is necessary.

Common Reasons for Suing a Health Insurance Company

Policyholders may sue for several reasons, including:

• Wrongful denial of coverage: Denying valid claims without justification.
• Delay tactics: Intentionally dragging out the claims process, causing financial harm.
• Underpayment of claims: Offering far less than the actual value of medical costs or policy benefits.
• Bad faith practices: Engaging in unfair or deceptive behavior that violates state law.

Many policyholders also ask, How Do I Know When to File a Bad Faith Claim Against an Insurance Company? — and the answer often depends on whether the insurer’s actions clearly violate state law or the terms of your policy.

These problems often leave patients wondering again: Can you sue your health insurance company when it refuses to treat you fairly? The answer is yes, particularly when the conduct violates New Mexico’s consumer protection rules.

Legal Help for Bad Faith Health Insurance Disputes

An attorney plays a critical role in building a strong case against an insurance company. When we represent clients, we gather evidence of the insurer’s actions, review policy language, and consult with medical and financial experts to demonstrate how the denial or delay caused harm. Depending on the facts, a lawsuit may be based on:

• Breach of contract: Proving the insurer did not fulfill its obligations under the policy.
• Bad faith: Showing the insurer acted dishonestly or unfairly in handling the claim.
• Negligence: Demonstrating the insurer’s failure to act reasonably led to damages.

By presenting these claims effectively, we increase the likelihood of securing compensation and holding insurers accountable for their misconduct.

Contact Vanden Bout Law to Discuss Your Insurance Case

If your health insurance provider in Albuquerque has denied, delayed, or underpaid your claim, you may be asking, Can you sue your health insurance company for fair treatment? At VandenBout Law, we take on insurers that act unfairly and protect the rights of policyholders across New Mexico. Call us at (720) 901-2984 today to speak with an attorney about your case.
Please read: Comparative Fault vs Contributory Negligence

“At VandenBout Law, we focus on helping policyholders in New Mexico navigate disputes involving insurance bad faith. Our practice exclusively represents individuals and families—not insurance companies. ”

Lawrence VandenBout

Trial Lawyer

Lawrence VandenBout

Mr. VandenBout has successfully tried multiple cases, he understands that many times the most efficient and effective resolution to a legal dispute occurs outside the courtroom and through the process of mediation. He has been successful in negotiating many favorable settlements for his clients. Mr. VandenBout also utilizes his experience to counsel and assist clients in developing strategies for minimizing the risk of becoming involved in potential legal disputes in the future.

Years of experience: Over 11 years
Recognition: Rising Star 2021, 2022, 2023 & 2024.
Location: Denver, CO