Those who purchase insurance are seeking to protect themselves against a financial loss. In doing so they expect that the insurance company will do their part and meet the obligations needed when an insurance claim is filed. Insurers who do not follow through with those obligations can end up in the middle of an insurance litigation claim.

Each state has statutes that deal with the responsibility of insurers when handling claims. Some states have their own insurance department, which are responsible for regulating insurance companies. If the insurer has unreasonable or unfair practices regarding insurance coverage and claims then policyholders, beneficiaries or third-party claimants may file court action seeking damages.

The claims for insurance litigation can vary. Some deal with a failure to make important information available for the policyholder or to conduct investigations into a claim. Others may deal the denial of a claim or if the insurer offers the policyholder a significantly less amount of money for the actual worth of the claim. Refusing to negotiate or settle claims are also a common form of insurance litigation.