“Bad Faith” refers to unreasonable or unfair conduct by an insurance company. An insurance policy is considered a contract between you and your insurance carrier. Every insurance contract includes an implied covenant of good faith and fair dealing.
Bad faith claims can arise when an insured submits a claim under their insurance policy. This can be a claim under a homeowner’s policy (e.g. for water damage, or fire loss), under an automobile insurance policy (e.g. collision, medical payments, or comprehensive), or under numerous other policies. The insurance company will then investigate the claim and ultimately accept or reject the claim. In some instances, an insurance carrier erroneously denies the claim or their conduct in connection with the denial is so egregious that it constitutes bad faith or an unfair practice.
Some possible examples of “bad faith” conduct are:
- Unreasonable denial of benefits to a claim
- Failing to promptly and thoroughly investigate a claim
- Deceptive practices or deliberate misrepresentations to avoid paying claims
- Unreasonable interpretation of records or policy language to avoid coverage
- Unreasonable delay in making payments to the policyholder
- Unreasonable attempts to under-settle or low-ball the payment of a claim
- Abusive and coercive tactics to settle claims
- In these circumstances, the insured can not only recover the amount due under policy, but potentially punitive or treble damages.
Our attorneys know how to properly and thoroughly investigate and contest denied insurance claims. If your insurance carrier has denied insurance coverage or acted in bad faith, contact an experienced attorney at Wallace and Graham to discuss your options.
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