You may not be aware of the term “insurance bad faith,” unless you have actually been unfortunate enough to have experienced it. Unfortunately, insurance bad faith is more common than you would expect and occurs when an individual purchases and faithfully pays each month for a policy meant to offer financial protection in the event of an accident. We expect that, by paying our premiums and meeting our end of the obligation, should an accident occur we will be fully covered by our insurance company. These beliefs are furthered by the plethora of insurance commercials which you will see any time you turn on the television. In those commercials there is always a kind and understanding person on the other end of the phone who promises to take care of your injuries and damages following your collision—then actually follows through.
Remember, that the goal of these commercials is to entice you to go with one insurance company or another, however the customer service and payout after you write your check could be another matter entirely. Any time an insurance company either denies a rightful claim or offers a lowball settlement figure, they are acting outside the promises they made when they sold you the insurance policy and this is known as bad faith. The legal definition for bad faith centers around intentional dishonesty, the refusal to fulfill a legal obligation or misleading a person by entering into an agreement with no intention of complying with the terms. This failure of the insurance company to comply with their stated obligations can cause damages to the insured which can be in the form of economic damages or even emotional distress.
The Expectation of a Fair Settlement
Our expectation of having faith in a company who has promised to help us out in the event of an accident is deeply ingrained in our society, and has resulted in specific bad faith statutes which directly address insurance bad faith. It is not absolutely necessary to prove fraudulence when a legitimate claim is refused, only a dishonest purpose or breach of an established duty because of a motive of self-interest. The motive of self-interest is most often a financial one in the case of large insurance companies. Insurance companies have an absolute obligation to conduct a full, thorough and absolutely fair and objective investigation on each and every claim. When they fail to meet that obligation, you as a consumer may have a legitimate bad faith lawsuit.
Why You Need an Attorney for a Bad Faith Lawsuit
While you will almost certainly require the skills of a knowledgeable attorney in order to handle a case of insurance bad faith, in truth not all attorneys have the skills and resources necessary to handle these bad faith cases. Insurance bad faith is a rather specialized legal area, full of a century of case precedent as well as complicated statutes and which are quite different from typical personal injury cases. Insurance bad faith cases may center around misconduct by specific insurance company employees as well as punitive damages. There are special pleading requirements involved, and expert testimony will likely be required in cases of insurance bad faith. A highly skilled attorney can ensure that your insurance carrier makes the payments to you as promised, and, if applicable in your case, can also file for punitive damages against your insurance carrier for the levels of stress and trauma caused when your original claim was denied.












