Imagine if your auto insurance company denied a valid claim for repairs to your car after an accident without bothering to give you a reason why. Or what if your homeowners insurance company refused to pay a valid claim after your home was damaged by a tornado—an event that is covered by your policy? Both examples are insurance companies acting in bad faith.When an insurance company fails to fulfill its obligations to you as the policy holder, they acted in bad faith and can be held liable for bad faith breach of contract. Bad faith claims can also be brought against an insurance company if they acted recklessly or illegally and disregarded your rights.
Each case is unique and no one case will have an identical outcome, but her are some common reasons a lawsuit is brought against an insurance company for bad faith.
It can be difficult to know for sure whether or not your insurance company acted in bad faith. So when you start to get a gut feeling or suspect they are not living up to your policy terms, then it is time to contact an attorney for help. It is not unusual for an insurance company to refuse to pay a valid claim without providing an explanation or justification. They also employ many tactics that will make you question or doubt yourself. Which is why an attorney can give you expert advice on whether the actions of the insurance company are or are not technically “bad faith.”
If your insurance company refuses to honor its contract by paying a valid claim, you have every right to sue them for damages. A bad faith law exists to balance the right of the insurer by rejecting an invalid claim with the rights of the policyholder to receive fair payment. Bad-faith insurance claims cases often require insurance companies to pay damages that go beyond what the original policy amounts listed. In addition to paying out the terms of the policy, they might have to pay statutory penalties or interest, liability judgments, attorney fees, punitive damages and emotional distress.
Going after a bad faith insurance claim is no picnic. These types of lawsuits are time consuming and complex. It is essential that you seek out an attorney with a bad faith insurance experience so they can tell you what damage to demand at the very beginning of the lawsuit. The insurance claim process is exhausting to begin with, not to mention dealing with an insurance company who refuses to cooperate. Let a qualified lawyer help protect your interests and act as an advocate for you.