Frequently Asked Questions
How do I know if I've been treated unfairly by my insurance company?
If you've made an insurance claim for benefits and your insurance company denies coverage, refuses to pay insurance benefits, offers you an unfair, low ball settlement on your insurance claim, or uses a variety of unfair stall tactics to delay payment of your insurance benefits, then your insurace company has acted in bad faith.
What does "Bad Faith" mean?
Bad Faith: Another name for breach of the implied covenant of good faith and fair dealing which is a potential cause of action against an insurance company arising out of their handling on an insurance claim. Bad faith may arise if an insurance company delays in payment of a claim, fails to pay a claim, or improperly denies coverage for an insurance claim. In addition, certain statutory violations can give rise to "bad faith."
I'm not sure if my insurance company has acted in bad faith, what would an example of bad faith be?
An insurance company can commit insurance bad faith in a variety of ways. For example:
- It is bad faith for an insurance company to continually place barriers in the way of its insured to delay payment of an insurance claim. These barriers can take the form of multiple examinations under oath by the insurance company's attorney or requiring the insured to repeatedly prepare the same and/or similar documents with respect to the insurance claim.
- It is insurance bad faith for an insurance company to refuse to pay portions of an insurance claim that are undisputed in an effort to force the insured to settle the entire insurance claim for less than a fair value.
- It is bad faith for an insurance company to fail to promptly and thoroughly investigate an insurance claim, or to only investigate options to deny the insurance claim rather than ways to pay the claim.
- It is bad faith for an insurance company to refuse to pay portions of an insurance claim based upon biased experts that are supposed to be independent.
- It is bad faith for an insurance company to require waiver of rights or releases, or to place restrictions that are not contained in the insurance contract, prior to paying portions of an insurance claim that are not in dispute.
What can I recover in an insurance bad faith lawsuit?
A successful bad faith claim against an insurance company could force the company to pay you:
- Everything that it owes under the policy, plus interest or "contractual damages".
- Any out-of-pocket expenses that you had to pay because the claim was denied (called "consequential damages") such as paying for a rental car or replacing a damaged roof.
- Payment for any mental or emotional distress that you had because of the denial.
- Payment to punish the insurance company and to discourage it from wrongfully denying valid claims in the future (called "punitive or exemplary damages"). Punitive damages are the most difficult to recover because you must prove that the insurance company acted in a malicious or fraudulent way.