What Does the Term “Bad Faith” Mean?
You were just involved in a major car accident and sustained serious injuries, so you filed a claim with your insurance company. Once your claim has been filed, your insurance company is then responsible for promptly offering and providing you with a reasonable settlement. However, if your insurance company delays or avoids settling, then you will have to go to trial. If a jury awards you a higher amount than the insurance policy limits ( Actslaw.com/Suing- insurance-company ), then your insurance company will be questioned for failing to settle the case earlier. You can sue your insurance company - this lawsuit is completely separate from your initial claim - for not settling a case when they should have settled it. Bad Faith lawsuits (which you file when you are suing your insurance company) are intended to encourage insurance companies to do the right thing during settlement negotiations by paying the insurance limits to you in an appropriate time frame instead of finding ways to escape their obligation.
What Are Circumstances of Bad Faith?
Bad faith comes in many different forms that either result in a settlement with the insurance company, an arbitration decision, or a verdict. Here are some examples for suing an insurance company for bad faith:
• Unwarranted denial of coverage
• Misrepresenting facts
• Using a policyholder’s past claims as a reason to deny a current claim that is valid
• Failure to disclose policy limits
• Failure to communicate important information to the claimant and to provide a time-limit demand
• Failure to conduct a full investigation of the claim
• Failure to provide a reasonable explanation for the denial of a claim
• Failure to confirm or deny coverage or pay the claim within a reasonable period of time
• Failure to enter into any negotiations for settlement of the claim or to attempt to come to a fair and reasonable settlement when liability is clear
• The cancellation of a policy because the policyholder made a claim
If your insurer tells you that you do not need a lawyer for your claim, that he or she wants you to sign a statement without a lawyer, or that he or she wants to settle your case before your injuries have healed, then they are acting in bad faith and are opening up grounds for suing that insurance company in the future.
What can you do?
Be aware that suing your insurance company is going to require a lot of time and dedication. Bad faith lawsuits that are over $10,000 can last for years. When suing your insurance company ( Actslaw.com/About-us ), ensure that you are fair, honest, and forthright because a jury will not side with you if you have filed your bad faith claim too quickly and have overinflated your compensation. It is always recommended to consider lawsuit mediation so you can try to come to an agreement outside of the courtroom - this option can save you a lot of emotional turmoil and time. You will need to hire an attorney that is capable of handling a long battle with your insurance company—preferably one who has experience dealing with insurance cases. Throughout your claim, your insurance company is keeping a detailed timeline, so it is in your best interest to keep your own records and backup documentation.