Insurance Claim Denial - Expected Case Cost Analysis

Coverage Counsel Review

The first step is a formal coverage opinion from an attorney specializing in insurance law.

• Initial coverage opinion letter: $2,500-$7,500
• Negotiation with carrier (pre-suit): $5,000-$15,000
• Total Phase 1 Cost: $7,500-$22,500

Declaratory Judgment Action

If negotiation fails, you may sue for a court declaration of coverage.

• Filing and initial pleadings: $5,000-$10,000
• Discovery (focused on policy intent): $15,000-$40,000
• Summary judgment motions: $10,000-$30,000
• Total Action Cost: $30,000-$80,000

Bad Faith Litigation

If the denial was unreasonable, a bad faith claim may be added. These are high-stakes and expensive.

• Additional expert witnesses: $15,000-$35,000
• Extended litigation (bad faith track): $50,000-$150,000
• Potential fee shifting: Some states allow recovery of attorney fees if successful.

Total Expected Cost

Expected midpoint: $60,000

(Range: $10,000 - $150,000+)

Which liability decision leads to this cost?

Understanding these costs is useful only if you know you are liable. Confirm your liability status before financial planning.

• Step 1: Confirm Liability (Decision Guide)
• Step 2: Compare Related Cases