Insurance is supposed to be your safety net. It is a contract that, should the unexpected occur, is meant to back you financially. Insurance is a mutual agreement between you and an insurer, and in exchange for paying premiums (at often high monthly or annual rates), you are guaranteed honest and fair dealings to receive money for your damages should anything happen to you or your property.
Insurance contracts have an “implied covenant of good faith.” This means that, although it may not be explicitly written in your policy, the insurance company is required to practice good faith measures and treat you honestly and fairly in your claim. Insurance companies are required to abide by state laws and strict insurance codes and if they fail to act in good faith, you have the grounds for a bad faith insurance lawsuit.
Unfortunately, despite laws and regulations, there are insurance companies that act to protect their own interests. Especially common when there are extensive or widespread damages like from natural disasters, some insurance providers will try to minimize what they will have to pay out on claims. With underlying competing interests, it is extremely common for there to be disputes in a claim, and also why laws exist to protect against bad faith tactics.
Examples of Acts in Bad Faith by Insurance:
Failing to acknowledge, approve, or deny coverages within a reasonable amount of time
Denying or reducing payment of a claim without proper investigation of the damages
Delaying payment of a legitimate claim with clear liability
Requesting an absurd amount of documentation or evidence from the insured
Misrepresenting provisions of the policy, material facts of coverage, or the value of a claim
Failing to approve or deny a claim within a reasonable amount of time after the insured submits proof of loss
Failing to give reasons or explanations for denying a claim
Using deceptive or misleading practices to reduce or deny coverage
Altering policy terms that could affect a claim without notifying the insured
Mistreatment, threats, or abusive behavior towards the insured meant to discourage a claim
Advising a claimant not to hire an attorney
Grounds for a Bad Faith Claim
When a claim is denied, it does not always point to bad faith by an insurance company. In some circumstances, there are legitimate reasons for a claim to be denied and quite simply, your policy may not cover the type of damage that your home sustained.
Insurance policies are meant to be complicated. They are long, complex contracts written in a language that is meant to help protect the insurance company and reduce the amount of responsibility an insurer might have on a claim. Complicated policies with lots of exclusions minimize how much they will pay out, as well as help defend against possible lawsuits.
It is always best to understand your policy and thoroughly examine your coverages and exclusions. If you suspect that your claim is being unfairly denied, unreasonably delayed, or unjustly underpaid, you can always reach out to an experienced insurance claims attorney.
An insurance claims attorney can review your policy, help calculate the accuracy of your damages, distinguish grounds for a bad faith claim, and provide the representation you may need to negotiate with, or litigate against, the insurance company. The good news is, insurance claims attorneys usually work on a contingency-basis, where there is no out-of-pocket expense until they win a case for you – which allows you to act when you feel the insurance company is not treating you honestly or fairly.
Types of Damages that can be Recovered from a Bad Faith Claim
There are typical damages that can be recovered from successfully proving bad faith by an insurance company. This can vary by state and by case, but generally the damages that can be awarded are as follows:
The actual amount of your damages
Attorney’s fees, interest, and court costs that can arise from having to litigate
Up to 3 times your actual damages by proving the insurance company “knowingly” violated insurance code
Mental anguish (in some situations)
Punitive Damages (in rare cases as they are more difficult to obtain)
Why Should I Contact an Insurance Claim Lawyer?
Many home and business owners find they have little trouble filing an insurance claim for their damages. Other times - usually when the stakes are much higher – there is a greater chance for dispute. You should consider contacting an attorney for help when:
You have questions regarding your policy coverages
The insurance adjuster’s estimate is lower than expected
Damages are extensive and claims are more complex
Claims are delayed or denied
Even if you have already received your settlement, it is not too late. You might not be getting all you deserve and there is free legal advice out there to take advantage of. Reach out to our team at Galindo Law if you have any questions about your insurance claim, policy, or the amount in benefits you received from your insurance company. We are experts at defending your rights and challenging bad faith claims.
Call us for a free consultation at 832-225-4963. We're here to help.
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