How to Respond When Your Insurance Company Acts in Bad Faith

You expect to be treated fairly when you buy insurance, whether it’s auto insurance, health insurance, homeowner’s insurance, or renter’s insurance. After all, you’re paying for both peace of mind and protection in the case of a disaster, such as a vehicle accident, fire, or other calamity.

Many insurance firms, on the other hand, prioritize profits over people, prompting them to arbitrarily contest claims in order to avoid losing as much money as possible. This can cause a great deal of stress for policyholders, who may decide to abandon their claim rather than fight for what they are entitled to under their policy.

The implicant covenant of good faith

Insurance firms have a legal obligation to treat policyholders fairly and operate in good faith. The implicit covenant of good faith and fair dealing is what it’s called. Even if it isn’t stated expressly in the contract or policy, each party is expected to behave in good faith. It’s possible that an insurance provider is behaving in bad faith if it arbitrarily rejects or refuses a claim. This is a violation of the good faith and fair dealing agreement.

An example of bad faith

Consider the following scenario: a person gets involved in a vehicle accident. Although the collision was not their fault, the other motorist fled and has yet to be located. This person can then submit a claim for uninsured motorist coverage under their own insurance policy. Essentially, if another motorist is uninsured and causes an accident, your own insurance company will compensate you. It’s frequently used in hit-and-run situations.

If this person’s insurance company refuses the claim without a legitimate basis — for example, if they didn’t investigate the issue and just refused it – this might be grounds for a bad faith lawsuit against the insurance company. The person would then be entitled to sue their insurance provider for damages for acting in bad faith.

In insurance bad faith claims, damages can be both compensatory (for what the person has lost) and punitive (damages intended to punish the wrongdoer and discourage others from acting similarly).

Insurance companies do not always act in good faith

Insurance companies, in an ideal world, would simply pay the claims that they are legally required to pay. Regrettably, this does not always occur. A skilled personal injury attorney may be able to pursue a case for insurance bad faith in certain instances. A plaintiff may prevail in this sort of litigation or claim if there was no reasonable basis for an insurer to refuse or dispute a claim.

If you’ve been hurt or lost anything in an accident, such as a vehicle accident, bus accident, dog bite, slip and fall, or truck accident, you may be entitled to compensation. We defend persons who have been wounded as a result of the acts of others at The Law Offices of Larry H. Parker.

We will fight for your entitlement to compensation and actively pursue your recovery – including taking legal action against insurance companies who refuse or dispute your claim in bad faith. To book a free first consultation, call 800-333-0000 or email now. We never charge a fee until we are successful in obtaining funds for you!!