Coverage and Bad Faith Insurance Claims
A bad faith insurance claim may arise when an insurer has wrongfully failed to pay the claim of an insured. In a bad faith claim, often the insurance company believes the claim is not covered under the insurance policy and denies the claim. Many situations can result in a bad faith insurance claim, including a delayed claim investigation, insufficient claim investigation, unreasonable delay of payment, and unreasonable denial of claim benefits.
Most states have adopted a bad faith cause of action in efforts to further protect insured individuals in their interactions with insurance companies. A bad faith cause of action is a combination of a tort and a contract claim. This action is based on a fundamental principal of contract law that there is an implied covenant of good faith and fair dealing on both sides of every contract. In addition, bad faith claims generally require that both the insured and insurer act reasonably.
If you believe your claim has been denied in bad faith, pursuing a bad faith insurance claim may be the best approach. Contact our firm to schedule a consultation with an attorney to discuss your bad faith insurance claim.
Avoiding Denied or Bad Faith Claims
Just because your claim has been denied does not mean you can file a bad faith claim against your insurance company. One of the easiest ways to avoid a bad faith claim is to file your claim promptly. If you wait too long to file your claim, your insurance company may deny your claim based on timeliness. If you have not met the time constraint guidelines detailed in your insurance policy for filing a claim, your insurance company can rightfully deny your claim. Another easy way to avoid denied or bad faith claims is to educate yourself about what your insurance company considers bad faith. As a policyholder, you are responsible for obtaining copies of your policy, reading your policy, and understanding the terms of your policy.
In all claim situations, insurance companies must act reasonably and in good faith in accordance with an insurance policy. If insurers fail to do so, a bad faith insurance claim can result.
Compensation in Bad Faith Lawsuits
If a bad faith claim occurred and a lawsuit is pursued, victims of bad faith may receive compensation in the form of monetary compensation equal to the value of their claim plus interest, as well as any other expenses that resulted from the wrongful denial of the claim. In addition, compensation for pain and suffering and punitive damages may also be awarded.
Good Faith Practices
Insurance companies can also take steps to avoid bad faith actions. Insurers have the duty to look for ways to cover your claim under your policy rather then looking for ways to deny your claim. By following this approach, an insurance company is acting in good faith by putting the interests of the insured before its own. In addition, insurers have the responsibility to respond promptly to all claims filed by policyholders and proper investigative protocols and claim-handling procedures must be followed. If a claim is denied, the insurance company must generally state specific reasons for the denial and notify the insured of those reasons within a reasonable time.
If you believe that you have an insurance bad faith claim, contact our firm to schedule a consultation with an attorney.
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