Insurance policies can protect you from financial loss. Your policy usually kicks in if you are involved in an incident or suffer any kind of damage. It may also cover you for injuries or damages caused to others. Sometimes, however, the relationship you have with your insurer may not be working as intended. In these cases, it might be possible to bring a lawsuit for bad faith.
The following overview will allow you to evaluate whether or not you have bad-faith insurance.
Overview
Insurance companies are bound by an implied covenant to good faith and fair dealing in every contract. A bad faith insurance claim can be brought against them if they breach this duty. These are tort claims and not contract claims. They can help you recover more than what the contract is worth.
Common examples
Bad faith claims occur when your insurance company fails or refuses to comply with its contractual obligations towards you as a policyholder. But, bad faith can be hard to define because it is based on court decisions that interpret state statutes.
However, the following are examples that show bad faith:
- Inadequate investigation or refusal to investigate claims that are legitimate
- Refusal by one party to defend other parties’ claims
- Unreasonable interpretation of an insurance contract
- Threats against the insured
- There are delays in the handling of insurance claims
- Refusal To Make a Reasonable Settlement Offer
Proving a Case
Common law and statutory laws both provide protection against bad faith claims in insurance. Common law stems from judicial precedent. It is also sometimes called “caselaw”. Statutory legislation was created by the legislature. This means you could have more than one avenue to pursue your claim.
State statutes may differ in how you can bring a claim. However, the common-law approach will likely remain similar in every state. A case of bad faith insurance will be proven by showing that benefits from the policy were withheld and that withholding these benefits was not reasonable.
If you want to prove your case, it is important that you can show that you have a valid insurance claim and that it was denied. Your insurer’s actions will only be considered reasonable if they are based on what happened at the time.
Common Questions
Below are some questions you might ask when speaking with an attorney for your first time.
- What is bad faith in insurance?
- How can I prove bad-faith insurance?
- What damage is available?
- What about a breach of contract case I can also bring?
Finding the Right Attorney to Meet Your Needs
It is vital to contact the right kind of bad faith lawyer to help you with your entire case. You can use the Super Lawyers search box to find a lawyer that specializes in your particular legal matter or geographic location.
Consider hiring a lawyer who is familiar with bad Faith Insurance Law.
Why should I speak to a lawyer about my case?
A lot of this law is state-specific. Therefore, you will need the guidance of someone who is familiar in your state’s laws. An experienced attorney will know exactly what you need to prove, and how best to do so. If you are interested in a settlement agreement, an experienced lawyer will be able to obtain any documents or interview witnesses.
An attorney can assist you in identifying potential problems and giving advice on how to address them. Your lawyer will track deadlines and file paperwork with all relevant courts and agencies so you have one less thing.