Bad Faith Insurance – Be aware of the Situation

Bad Faith Insurance

When it comes to claims settlement, insurance companies are in the driver's seat. They are the experts, have more negotiating power and are more financially strong than the policyholder. Most courts recognize that in any insurance policy, there is a duty of good faith and fairness.

You may be allowed to file a lawsuit with hello from a bad faith insurance lawyer if your insurance company fails to act in a reasonable way to process, investigate, or pay your claim. State law shapes how bad faith is defined in the insurance context. You can make a claim, if you can have an insurance claim rejected in violation of a state statute under common law established by courts. Let us examine closely what constitutes bad faith for better understanding this legal claim.

About Bad faith Insurance

Under Oklahoma Law, good faith and fair dealing is a legal obligation on insurance companies. This means that an insurance company must assist you in making a claim, and it must find reasons for covering your claim. If insurers contravene this obligation of good faith, they are liable for bad faith claims to their insureds.

The insured may seek compensation for more than contractual damage under the policy in the event of a claim of bad faith, including costs for:

  • Additional Financial losses 

  • Embarrassment and maligned reputation 

  • Mental or emotional suffering

Furthermore, if the insured can show adequate insurance company liability, they may also seek punitive damage.

Lawyer in the office

First Party Bad Faith Insurance

Bad faith occurs if an insurer fails to pay the claim of a policyholder in a reasonable period or for a fair amount. First-party bad faith examples include:

  • Denying a claim without an explanation;

  • Coming up with an exceedingly low settlement amount;

  • Refusal or failure to investigate for the claim;

  • Refusal or inability to communicate with a policyholder;

  • Refusal or failure to disclose a client’s policy limits.

  • Prolonged payment;

  • Interfering with negotiations for settlement;

Third Party Bad Faith Insurance

Although the misconduct of the first party towards the insurer's policyholder is characterized by bad faith, bad faith stems from insurance claims against the insurance company of a third party. Another example of a third-party insurer's bad faith includes:

  • Undue delay;

  • Unreasonably interference to an insurance policy;

  • Refusal to defend a lawsuit;

  • Insufficient investigation of the claim

  • Refusal to make a fair settlement offer;

  • Threatening the insured people.

Some tactics could be considered bad faith for insurance companies. Moreover, the rules governing disputes about bad faith vary between states. An experienced bad faith insurance lawyer may help protect your rights if you believe your insurance company has acted wrongly. Consult a bad faith insurance lawyer to see whether your insurance company is in the wrong. We are The West Law Firm where you can get experienced lawyers to represent your case and ensure you get what you deserve.

** Disclaimer: The above article does not imply a relationship between attorney and client, nor is it legal advice.