Hey there, have you ever had to deal with an insurance company that seemed to be dragging its feet or outright refusing to cover a claim that you believe should be covered? Well, you’re not alone. In some cases, insurance companies act in bad faith, which means they are not fulfilling their legal obligation to fairly and promptly honor their insureds’ claims. If you’re in this situation, you may be able to take legal action and sue your insurance company for bad faith. Let’s explore this topic in more detail.
Suing an Insurance Company for Bad Faith: A Comprehensive Guide
As an insured individual, you expect your insurance company to have your back when it comes to covering your losses. But what happens when they don’t? What if you believe that your insurance company is not fulfilling their duties towards you? Well, in such cases, you can take legal action against them. In this article, we will talk about suing insurance companies for bad faith, the grounds for it and how to go about it.
What is Insurance Bad Faith?
Insurance bad faith is when an insurance company fails to fulfill its contractual obligations towards its policyholders. When you sign up for an insurance policy, there are certain provisions mentioned in the contract that the insurance company has to fulfill. Failure to fulfill these conditions is classified as bad faith. This is a breach of the insurer’s responsibility to the policyholder as it removes the company’s obligation to pay a valid claim.
Common examples of bad faith include deliberate delay of payment, wrongful denial of claims, underpayment of a claim, and failure to conduct a proper investigation. In general, bad faith occurs when an insurance company intentionally acts in a manner to unreasonably deny or delay a claim by a policyholder.
Grounds for Suing an Insurance Company for Bad Faith
The following are common grounds for filing a lawsuit against an insurance company for company bad faith:
1. Denial of a Valid Claim: If your insurance company denies your claim when it’s a valid one, it is best to pursue legal action against them. A valid claim means that your policy covers the losses that you’ve sustained, and you have provided legitimate evidence to back up your claim.
2. Undervaluing Your Claim: When an insurance company pays less than you are entitled to, it is known as undervaluing your claim. This is another indication of bad faith, and you are within your rights to file a case against them.
3. Delay in Paying Your Claim: In some cases, an insurance company may drag out the claims process or delay paying out to wear you down. If they refuse payment without an apparent reason, you may have a case for bad faith.
4. Failure to Investigate Your Claim Properly: When you file an insurance claim, it’s your insurance company’s obligation to investigate the claim properly. They need to evaluate the costs, damages, and make an informed decision based on your policy’s terms. If they don’t perform a proper investigation and deny your claim, it may be a sign of bad faith.
How to Sue an Insurance Company for Bad Faith
Suing an insurance company for bad faith is a complicated process that should not be taken lightly. Here’s how you can hold your insurer accountable and seek compensation for any injuries or losses you sustained.
1. Gather Your Evidence: Before filing a bad faith lawsuit, gather all the evidence you have relating to your insurance claim. You may have emails, letters, receipts, and other documents that prove your claim is valid. Ensure that you have all the necessary proof, so your case is well supported.
2. Consult a Lawyer: Engage a qualified insurance lawyer to guide you through the process. A professional attorney will help you determine if you have a case for bad faith and advise you on the proper course of action to take. Look for a lawyer who has experience with bad faith insurance claims.
3. File a Complaint: You will need to notify your insurance company of the bad faith claim you are lodging. Typically, this is done in the form of a formal complaint or demand letter. You must inform them of your displeasure and give your insurer time to investigate and respond.
4. Await a Response: Once you submit your complaint, the insurer has to respond within the deadline given. If your issue remains unresolved, you can file a legal case against the insurer in court. Your attorney will help you file the legal paperwork and ensure that all the deadlines are met.
In case a lawsuit is filed against the insurance company, the duty of proof is on the policyholder. Therefore, you must be able to provide enough evidence proving that you have met insurance policy qualifications and that your insurance company is acting in bad faith by being untruthful about your claim.
What Kind of Damages Can I Recover?
If you file a bad faith insurance lawsuit and win, you may recover compensatory, consequential, and punitive damages. The compensatory numbers are intended to reimburse you for any losses you’d have compensated if your insurance company had acted in good faith. These damages may include missed wages, medical and expenses associated with property damage. Punitive damages are the repercussion that occurs in circumstances of recklessness, intentional misconduct, or malicious acts, and these are intended as punishment to your insurance company for their wrongful acts against you.
Conclusion
If you have a suspicion that your insurance company is not fulfilling its contractual obligations towards you, you may have a case for bad faith. Remember that taking legal action against an insurance company is a complicated process and will require significant evidence and sufficient legal support. Consult with an experienced insurance attorney to review your policy and help you determine whether you have a case that is worth pursuing. With their guidance and your evidence, you may be able to hold your insurance company accountable and seek compensation for any losses you’ve sustained.
