In some cases, an insurance company may be operating in bad faith, which means that their negotiations may be set up to work against you. When you are working on negotiating a settlement with your insurance company, bad faith can come into play – and this poses an issue, because insurance companies have a duty to protect you and to negotiate all of your claims in good faith. Not only this, but insurance companies for third parties have a duty to also provide good faith toward an injured person. That duty, however, is much less than the duty owed by your own company.
But how is a claim of bad faith against a third party’s insurance company conducted? This typically only arises if the company has engaged in outright lies or fraud through its adjuster. They may have even interfered with your ability to pursue the claim, which could include something as harsh as tampering with a witness. This is where a personal injury attorney would come into play, when a person believed that a third-party insurer has engaged in such outrageous behavior.
Some Cases are not Actually Bad Faith, One Must Remember.
An insurance company, in certain situations, may deny a claim simply due
to a mistake or error. They may have a reasonable basis for having made
the mistake as well. This does not qualify as bad faith. The policy owner,
in many states, must prove that the insurance company failed to make a
thorough investigation before denying the claim. Questions to ask go as
follows: Did the insurance company miss or ignore obvious facts and information
that would have proven the claim to be valid? Did the insurance company
intentionally conduct an inadequate investigation in order to remain ignorant
of facts that would have proven the claim to be valid? These are all things
to be taken into consideration in a bad faith case.
So what are common themes in bad faith cases? The facts and circumstances at the time of the claim denial matter the most. The policy owner will have to show that there are good reasons to guess the claim investigation was sloppy for a reason. The bad faith lawsuit will be more likely to have success if it appears that an innocent mistake was made in an otherwise thorough investigation.
What Kind of Damages Can One Receive in a Bad Faith Case?
The policy owner could recover consequential damages that occurred as a result of the bad faith denial of the claim. What are consequential damages? They are damages that were a predictable consequence of having the claim denied. Examples go as follows: the cost of defending an injury lawsuit that was brought against the covered driver and the cost of suing the insurance company to prove that coverage should have been granted. The policy owner may also be able to recover damages for emotional distress caused by the claim denial.
If you believe that your insurer is acting in bad faith, you may have a claim. Call WTW today to get a consultation with an attorney and a review of your case.