What do you do when an insurance provider does not properly handle your claim? This mishandling can happen in a number of ways. Your claim may have been denied outright due to a poor or otherwise improper investigation of your claim, leading to an unfair decision by the insurance company. Or your insurance company may refuse to fight for you and instead is holding you responsible for any liability you may be facing.
In either case, United States law holds insurance companies responsible to a number of duties to their policyholders, and when those duties are not met, you can file a lawsuit for insurance bad faith. Insurance policies by default are made under a legal precedent known as the “implied covenant of good faith and fair dealing,” which states that two parties who enter into a contract together will do so honestly and without the intention to defraud the other. Insurance companies must follow this presumption, meaning they must stand by the policies as written and perform the duties they agreed to when a legitimate claim is made.
There are numerous types of insurance available, and all of them could potentially act in bad faith. If you feel as though you have been treated unfairly by an insurance company, it is critical to consult with a legal professional who specializes in insurance law in order to know whether you may file a tort claim against the insurance company that has failed you.
Auto Insurance Claims
If you have been in an auto accident, whether your fault, the fault of someone else (or a shared fault of some kind), an insurance company has several duties. One is to investigate the claim and determine whether or not the policy covers the damages. If this investigation was conducted improperly or the property was incorrectly valuated, you could potentially file a bad faith claim.
Say you are rear ended at high speed and your body shop estimates the repair will cost upwards of $2,000. Your insurance company sends an investigator to the scene who deems that the car may be fixed for only $1,000 if the shop uses aftermarket or salvaged parts and uses a less-detailed paint procedure. Since aftermarket and salvaged parts could potentially jeopardize the operating ability or safety of your vehicle, the insurance company is not honoring their liability coverage agreement, and you, the policyholder, could potentially file a bad-faith claim against the insurance company.
Medical Malpractice Claims
Medical malpractice suits can result in significant court-ordered awards, and as such many medical practitioners will carry insurance to absorb their liability should they make a mistake or an accident happens. In these instances, these companies have a duty to fight on their policyholder’s behalf in the suit against them. It is in their interest to do this even if all or part of the claim against their insured doctor is not covered by the policy.
Likewise, an insurance company is also oblijudgmentpay a judgement awarded against their policyholder up to their policy limit. If the policy does not cover the lawsuit, then the insurance company is not legally required to pay. However, if all or part of the claim has been found to be covered, the insurance company is required to pay on behalf of their policy holder for the portion of the claim covered under the policy.
If you feel as though you would like to file a claim, you must first file a Civil Remedy Notice of Insurance Violation. This public complaint gives the insurance company 60 days to respond and correct their misconduct. If they fail to respond or refuse to comply, you could potentially bring the case to court.
It is not advised that you face this or any form of insurance bad faith claim without first consulting with and retaining legal representation from a Board Certified Tampa insurance lawyer. Danahy & Murphy, P.A. specialize in insurance litigation cases, and have taken numerous bad faith claims to court, with a strong record of success. We have the experience and insight help you navigate the complicated legal process of filing an insurance bad faith suit and ensure that maximum recovery is aggressively pursued.