Can You Sue Insurance Company for Bad Faith?

It would not be wise to own a house without purchasing property damage insurance. Sudden wildfire, storm or any other incident can empty your pocket in a second. Purchasing property insurance can cover your back financially. This types of insurance provide dual coverages. One is to cover your damage and the other one is for liability to the other party who gets injured inside your property.

However, the insurance company has a legal obligation to act in good faith when they have to investigate and pay out a claim. But if you lose financially and the insurance company refuses to come to your aid, then what happens? In that case, you have to hire a bad faith insurance lawyer to get the compensation.

What Types of Actions Determine Bad Faith?

According to various research, if an insurance company denies a claim, which does not mean that the insurer has acted in bad faith. If the insurer takes any steps without justification unreasonably, then it is called act in bad faith. Keep in mind that the insurance policy is complex and the companies make it such a way to protect themselves. After all, they are in the market to do business, right? Here, a list of examples is given that constitute bad faith under the law including:

●       The insurer fails to investigate a claim promptly.

●       Refuses to pay a valid claim unreasonably.

●       Cannot explain its reasons for denying a claim appropriately.

●       Fail to follow reasonable standards while investigating a claim.

●       Refuses to settle a valid claim with a third party

●       Does not want to communicate with the policyholder.

●       Misrepresents basic facts about a homeowner’s insurance policy such as limits of coverage.

●       Has advised you not to hire an attorney

●       Accused you of misbehavior

●       Fail to submit forms as a reason for denial without requesting

How to Prove Bad Faith?

Always a policyholder has to take the burden of proving a bad faith claim. You can prove it in two ways. The insured person has to prove that an insurance company denied a claim despite the liability being clear. Only a policyholder can pursue a common law bad faith claim.

Before filing a lawsuit, you must document all evidence of your dealings with your insurance company. You have to keep records that can help the court to reconstruct an accurate timeline of events. Apart from that, you have to hire a bad faith insurance lawyer who has prior experience with these claims and knowledge about how an insurance company works.

Talk to Your Attorney

Remember that only an experienced attorney can investigate your case properly, evaluate and calculate the benefits that you owed. In this way, the authority can make a suitable decision about suing a greedy insurance company. If you ever fall into their trap, call The West Law Firm to get their assistance.

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