What Are Different Elements of Bad Faith Insurance Claim?
Bad faith insurance mentions an insurer's decision to renounce its commitments to its customers, either by refusing to pay the legitimate claims of the policyholder or by reviewing and handling the claims of the policyholder within a reasonable period.
Insurance companies behave in bad faith if they misrepresent the meaning of the insurance contract to the policyholder in order to avoid paying a claim. We often behave in bad faith if we fail to disclose program restrictions or exclusions to policyholders until they buy a policy, therefore, you need a bad faith insurance lawyer.
There are many ways in which an insurance company can behave in bad faith. If the policyholder suspects bad faith, he must contact the insurance company and consult a solicitor.
Common-Law Bad Faith Elements
The features of bad faith in common law are not the same from state to state. Many states describe bad faith as "unreasonable or without proper cause." Some states take a constricted view. Responsibility only if the claim is not "fairly doubtful" and the insurance company acknowledges that this is the case. Further complicating matters, some States view this claim as a breach of contract, and in other States it is a breach of contract.
Under the common law principle of negligence, the insurer owes the policyholders a good faith duty due to the relationship with the parties. Proving two elements of a common-law statement:
Benefits due under the program have been withheld. In this first prong, you should determine that you have a valid claim under the terms of your rule. You also need to report that your statement has been rejected by the insurer. Many states require you to make a final request before filing a lawsuit.
The justification for the denial of benefits was not fair. Whether the insurance company behaved appropriately shall be judged objectively on the basis of the circumstances and the facts as they existed at the time of the decision in question. In Oklahoma, for instance, liability will only be created if the claim is knowingly dismissed on a reasonable basis. Mere error is never sufficient to prove bad faith.
Dealing with Bad Faith Insurance
State laws that address bad faith, also known as deceptive compensation practices, are designed to protect customers from bad behavior by insurance companies.
Many legislations require an insurance company, operating in bad faith, to pay substantial damages to compensate the claimant for the denial of a claim. Such payment extends not only to out-of-pocket expenses and borrowed funds to cope with claims, but also to missed work and charges for lawyers.
Contact bad faith insurance lawyer at The West Law Firm.
** Disclaimer: The above article does not imply a relationship between attorney and client, nor is it legal advice.