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Bad Faith Lawsuits against Unfair Handling of Insurance Claims
Insurance relationships dictate that if you pay for a car insurance policy, then the insurance company owes you certain responsibilities.
Their basic responsibilities to you in case of a car accident are the following:
- Investigate and properly handle claims that will result from the said car accident.
- Provide you with a lawyer if you get sued for personal injuries or wrongful death.
- If you are found to be at fault for the car accident, the insurance company has to pay the amount rewarded to the victims, up to the limit of the car insurance policy.
If they fail to fulfill their end of the agreement, then you may be a victim of unfair handling of insurance claims or insurance bad faith.
Bad faith is a legal term used to describe civil suits that are filed against insurance companies for unfair practices.
Under US law, insurance companies owe to the people they insure a duty of good faith and fair dealings.
If a claimant wins a bad faith case against the insurance company, more often than not, the awarded damages exceed the amount specified on the contract policy.
Bad faith usually arises from non-payment of personal injury cases where the liability of their client has already been established but the insurance company still fails to pay the injured party.
Typically, the injured party’s lawyer will send notices and a deadline to the insurance company. If the insurance company still fails to make payment for the personal injury claim then the plaintiff’s side will have to decide whether they will pursue a bad faith case.
Pursuing a Bad Faith Lawsuit
Once they decide to pursue a bad faith case against the insurance company then the personal injury is over.
You should remember that bad faith lawsuits are not concerned with how the insurance companies handled the personal injury claim but rather on how they treated their clients – the ones who pay for the car insurance premiums.
The court will now then question whether the insurance company honored their side of the insurance agreement.
If the liability of their client has already been established by the court in the personal injury case then their refusal to pay the injured party based on their client’s policy may be considered proof that they have committed bad faith.
Most of the time, the client and the injured party agree to a deal to go after the insurance company. This is because the injured party does not really have a direct claim against the insurance company.
The client of the insurance company usually agrees to a settlement to avoid being directly sued which could endanger their own savings and assets.
Getting Help
Bad faith lawsuits are pretty complicated and it can be tedious and time consuming. If the personal injury claim is not large enough, sometimes it’s not even worth to pursue as the cost may outweigh the gain.
So if you have been a victim of unfair handling of a personal injury claim, you should consult your car accident attorney first before pursuing a bad faith case.
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