Insurance companies have legal duties to defend and indemnify the people they provide policies for. As a result, if a third party makes a claim for something that is covered by the policy, it is required that the insurer properly and fairly investigates the claim. The insurer is also required to offer the policyholder a legal defense if the claim is covered.
In the event the insurance company does not hold up its duty, it is considered bad faith. This can be grounds for filing a claim against the insurer. Keep reading to learn more or contact The Law Offices of Larry H. Parker now at 800-333-0000 to speak to a legal representative.
What Damages May Be Covered in a Bad Faith Duty to Defend Case?
There are a number of damages you may be eligible for. First and foremost, you may be eligible to recoup the cost of hiring a personal injury lawyer to defend yourself against the claim. You could receive damages related to emotional distress caused by the ordeal and could be awarded punitive damages if the insurer is found to be in serious dereliction of their duty.
What is Their “Good Faith” Obligation?
An insurance policy is actually nothing more than a contract between you and your insurer. Every contract requires that both parties act in good faith to fulfill the obligations of the contract. For example, your insurer must pay claims that were a “covered risk” under your policy, investigate claims to determine liability, provide you with legal defense against a third-party claim, and do their best to settle claims.
What Acts Count as “Bad Faith?”
Now, you may wonder: What is bad faith? What actions would an insurer have to take to be founded in bad faith? There are many, including unreasonably delaying payment to a client or refusing to pay at all, compromising your ability to defend a lawsuit, not conducting a fair investigation, not explaining why a denial was denied, not communicating with you about the claim, and unreasonably refusing to settle a claim.
What Damages Can Be Recovered in a Case of “Bad Faith”?
If you are the victim of an insurer’s bad faith, you may be able to recover damages for the amount you had to pay to the injured party, the cost of defending against that party, damages for pain and suffering, legal fees required, and more.
You pay for insurance because you want protection. It is very simple. Your insurer should provide the coverage they include. If they do not, then it is worth getting a free legal consultation to find out what your legal options may be.