What is Bad Faith Insurance?
Let’s say you’re involved in a car accident. After making sure you’re safe, one of the first things most of us would do is to call our insurance company. Immediately reporting the accident will ensure the ball gets rolling on your insurance claim so you can get back on the road. If it’s a valid claim, your insurance company should be there for you—right?
This isn’t always the case. In many cases, an insurance company may act in bad faith, which means they’re not honoring their end of the bargain. While most people are shocked that their insurance companies would act in such a way, it’s important to remember that these companies are still trying to make a profit. Paying out on as few claims as possible is how insurance companies make money.
But how do you know if your insurance company has acted in bad faith? What even does this look like? Here, we’re taking a closer look at bad faith insurance and determining what you can do if you believe you’ve been the victim of this issue.
WHAT IS BAD FAITH INSURANCE?
When you purchase an insurance policy (whether it’s car insurance, life insurance, or any other type of insurance), you’re essentially entering into a contract with the insurance company. In return for your monthly payments and any premiums, the insurance company is agreeing to provide compensation in the event of an accident or any other event that is included in the insurance policy. In a car insurance policy, for example, this could range from something as simple as repairing a windshield to completely replacing your vehicle if it’s totaled in a serious car accident.
This sounds like a fair agreement, right? Well, it isn’t always so simple. In some cases, your insurance company may fail to hold up their end of the bargain. By failing to honor the coverage outlined in your policy, your insurance company is acting in bad faith. There are many different ways that an insurance company can act in bad faith, but most come down to simply refusing to pay a valid claim or failing to pay the full amount of a claim.
But this doesn’t mean you should simply accept this state of affairs. While most insurance companies work hard to honor valid claims (quickly and accurately), bad faith insurance does still happen. If you think it may have happened to you, you’ll want to call a bad faith insurance attorney to learn what you can do next.
EXAMPLES OF BAD FAITH INSURANCE
Essentially, bad faith insurance occurs when an insurance company breaches their own contract with a customer. But what exactly does this look like? It’s important to note that an insurance company isn’t acting in bad faith just because they deny a claim. However, if this denial is from a perfectly valid claim (as outlined in your specific policy), then the company might be acting in bad faith—which means you should consider hiring a bad faith attorney.
To better understand this concept, here are some of the most common instances of bad faith insurance:
- Denying a valid claim without cause.
- Delaying a claim for an unreasonable amount of time.
- Failing to fully pay out on a valid claim.
- Offering a “low ball” settlement.
- Failing to conduct a thorough investigation.
- Misrepresenting the language of a policy.
If any of these actions sound familiar, you should call a bad faith insurance attorney. Even if they don’t end up taking your case, they can help you better understand the legal circumstances and determine whether or not you were the victim of bad faith insurance.
WHAT CAN A BAD FAITH INSURANCE ATTORNEY DO FOR YOU?
If you believe you’re the victim of bad faith insurance, you should reach out immediately to an experienced bad faith insurance attorney. These professionals can provide the knowledge and expertise to help you understand—and potentially win—your case.
You don’t want to face off with your insurance company alone. Understanding the particulars of your coverage can be much more challenging than most of us initially imagine. Let’s be honest—how many of us actually read our entire insurance policy word by word? Well, you can be sure that the insurance company (and their lawyers) know your policy inside and out.
Large insurance companies have entire teams of lawyers who focus solely on these types of cases. By working with a bad faith insurance attorney, you’ll have someone in your corner who knows how to fight—and win—these types of cases. They’ll ensure you aren’t bullied by the insurance company or other lawyers and that you’ll have the tools and information to potentially win your case.
WHAT DAMAGES CAN YOU RECOVER IN A BAD FAITH INSURANCE CASE?
In a successful bad faith insurance suit, the courts will see to it that your insurance company honors your claim and pays out the full amount. However, there are additional damages you can recover in a bad faith insurance case.
In addition to receiving the claim amount, you may also receive compensation for:
- Attorney fees.
- Emotional distress.
- Punitive damages.
- Statutory penalties.
CONCLUSION – WHAT IS BAD FAITH INSURANCE?
Just think about it. If you’re in a car crash, you’d call a car accident law firm. If you’re in a bicycle accident, you’d want to work with an experienced bicycle accident lawyer. So, where do you turn if you’re the victim of bad faith insurance? A bad faith insurance attorney, of course. These professionals can help you understand your case, assess the most logical course of action, and if needed, fight for you in court.
It’s the responsibility of your insurance company to honor any valid claims on your policy. That’s what you’ve been paying for month after month, right? However, this doesn’t always happen so smoothly as insurance companies may act in bad faith. If your insurance company fails to pay on a valid claim, delays payment, offers a “low ball” payment, or fails to conduct a thorough investigation, they’re acting in bad faith. Call an experienced bad faith insurance lawyer to ensure that you receive fair financial compensation.