Homeowner's insurance is meant to provide relief after unexpected damage or disaster strikes your property. Though you may lose possessions or even your entire home, the insurance will ideally pay for repair and replacement, to the extent possible.

However, depending on the customer service approach of your insurance carrier and the fine print in your policy, you might find that what was supposed to be a source of relief turns out to be sheer frustration. It's not unheard of for insurance carriers to drag their feet, demand evidence that's impossible to provide, or deny your claim entirely.

What can you do in such a situation?

What the Law Says About Inappropriate Action by Insurance Companies

Insurance law is largely a matter for states to decide on, so your rights will depend on what your state legislature and courts have passed or said.

Also a factor in claiming coverage is the exact language and terms of your insurance policy, which is a binding contract. (This assumes that your policy wasn't written in an unconscionable manner, but there's enough standardization and regulation of the insurance industry to make this unlikely).

You can expect, in any case, to find that there's some sort of legal basis upon which to claim that an insurer that fails to provide the coverage you're owed under your policy is acting unlawfully, or in "bad faith."

You might, for example, have a "cause of action" (a basis upon which to sue) for an insurer's bad-faith failure to defend you or settle a claim, in a situation where you've been sued under the personal liability section of your homeowner's policy.

Or, you might have a cause of action for the insurer's refusal to pay your claim without a good reason. If, for example, the company didn't bother to investigate your claim of damage before denying coverage, you could sue on this basis.

What You Might Win in a Lawsuit Against Insurer

If you prove and win your claim in court, the judge should award you the amount the insurer should have paid you in the first place, possibly with the addition of your attorney fees.

In rarer cases, if you can prove that insurer's behavior was wanton or reckless and caused you bodily harm, you might be awarded damages for emotional distress.

Should You Sue Your Insurance Company for Bad Faith?

Having the right to sue doesn't mean it should be your first step. Remember, if you lose, you'll be on the hook for your attorney fees.

Some steps to take before suing include:

• Reread your current policy to make absolutely sure of the relevant language.
• Request that a supervisor review the actions of your immediate contact at the insurance company.
• Contact your state insurance regulators to see what help they might offer.
• Write what's called a "demand letter," setting forth your claim and attaching copies of any key evidence, requesting payment by a certain date (60 days is standard), and asserting your intent to pursue legal remedies if you don't receive payment by that deadline.

Consulting with an attorney could actually help you make the decision of whether to sue. The attorney can help evaluate the strength of your claim and the likelihood of success, and also help with preliminary steps, such as writing a demand letter.