Bad Faith Insurance Settlements Examples
You sustained personal injuries in a car accident. As a result, you've filed an insurance claim to get compensated for the damages you suffered. As a policyholder, you've always made regular auto insurance premium payments as agreed. However, your insurance company refuses to pay you. They provide no reason for denying your claim or providing inadequate coverage. Now, it refuses to respond to your demands. What should you do?
Many states allow you to file a bad faith insurance settlement claim against the insurance company. Read on to learn about the indicators of bad faith insurance settlement practices.
Bad Faith Insurance Settlements: The Basics
Insurance is a form of contract. The policyholder pays premiums in exchange for an insurance company's promise. The insurer promises to compensate the policyholder for legitimate claims up to the policy limits.
The duty of good faith binds an insurance company. The insurer is bound by the contractual duty to act in good faith. This duty is implied by common law in the relationship between the insured and the insurer. This duty may also be required explicitly by state law.
When you file an insurance claim, the insurer must fulfill its duties. It is obligated to resolve your claim and pay you as required under the policy or offer a reasonable settlement.
The insurance company should perform the following:
- Investigating your claim in a reasonable amount of time
- Making a fair deal
- Responding to your reasonable requests
- Providing reasonable services
If your insurer fails to fulfill its duties as stated in the policy language and by law, you may file a bad faith insurance lawsuit. You can file a lawsuit based on the insurer's bad faith tactics related to lowball settlement amounts, among other issues.
Specific insurance laws and requirements may vary by state and by insurance company. Check your insurance policy language to determine whether your insurer failed to keep their promises.
It may be challenging to decide on your own. Depending on the circumstances, getting assistance from a bad faith insurance lawyer or personal injury lawyer.
Examples of Bad Faith Insurance Settlements
An insurance company can be liable for bad faith insurance settlements and denials in several ways.
Some bad faith insurance settlement examples include the following insurance company acts. An insurance company can be liable for a bad faith case if the insurer:
- Fails to inform the claimant of pertinent information required to investigate the claim properly
- Fails to perform proper investigation of the claim
- Engages in the wrongful denial of the claim without thoroughly investigating the claim
- Fails to accept or deny the coverage claim within a reasonable period
- Offers an unreasonable settlement when liability and coverage are clear
- Offers substantially less money for compensation than the actual value of the claim for medical bills, emotional distress, and other damages
- Fails to have an insurance adjuster provide an explanation or proper reasons for denying a claim
- Fails to have an adjuster respond to a request for informational purposes
- Attempts to settle a claim based on a policy altered by the insurer without giving notice to the insured
- Alters a record of the insurance claim
- Makes misrepresentations regarding the claim to the insured
- Requests unnecessarily burdensome demands
- Uses illegal or fraudulent methods of investigation
- Suggests you hire a personal injury attorney
If any of the above situations apply to your case, seek legal assistance. Your insurer likely handled your claim in bath faith. In such cases, you could have a valid claim to sue the insurance company for its bad-faith insurance settlement practice.
What To Do if Your Insurer Handles Your Claim in Bad Faith
When you suspect that your insurer has failed to live up to its obligations under your insurance contract, there are several steps you can take. You may have a bad faith insurance claim against the insurer.
Before filing a lawsuit, write a letter claiming bad faith to the insurance company. It may draw the company's immediate attention, and the company may attempt to resolve the issue. However, if the insurance company fails to fix its bad faith insurance practice, you should consider taking legal action against it.
Get Legal Advice From an Experienced Attorney
If you believe your insurance company has used bad faith insurance settlement practices, you may have a legal claim. Combatting bad faith insurance settlement offers usually requires specialized knowledge of that particular area of law.
If you're considering filing a legal claim against the insurance company, consult with an experienced bad faith insurance attorney. They can provide a case evaluation and help you explore legal options to maximize your ability to recover damages.
You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.