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Insurance Bad Faith: Recognizing and Pursuing Legal Remedies
Insurance companies often take a fair amount of time to respond to a claim. They also frequently make low settlement offers to try to save money. It is not easy to deal with an insurance company. However, insurance companies have basic contractual obligations they need to meet.
Whenever there is an insurance company involved, there is always a contract. Their relationship could be with you, or it can be with a third party who has caused you damage. Each party to a contract has an obligation to act in good faith.
Generally, bad faith is when an insurance company deliberately fails to uphold its obligation to its clients to pay claims in a timely manner. While an insurance company’s contractual obligation is to its own policyholder, you take on the legal right to file a bad faith lawsuit when the insurance company refuses to pay you promptly.
Examples of Insurance Bad Faith:
Here are some things that could be considered bad faith:
- Taking an unreasonably long amount of time to respond to your claim;
- Unreasonably denying your claim in the face of compelling and persuasive evidence in your favor;
- Unreasonably denying your claim based on a wrongful reading of a policy; and
- Making impossible demands for documentation from you.
You should be alert for signs of bad faith early in the process and prepare to act if necessary. If the insurance company seems like they are being uncommunicative or acting impossible when they are communicating, it is a possible sign of bad faith.
Suing the Insurance Company
A bad faith lawsuit is against the insurance company instead of the party responsible for your injuries. You are seeking to make the insurance company pay for the harm they caused you in processing and settling your claim. Delaying payment can cause you extreme stress in an already difficult time.
Damages in a Bad Faith Case
Here are some of the damages that you may be able to obtain in bad faith lawsuits:
- Emotional distress;
- Consequential damages;
- Statutory damages; and
- Attorney’s fees.
Sometimes, juries can hand down substantial verdicts to punish the insurance company for their conduct. The United States Supreme Court case that set a precedent for punitive damages was decided after a jury awarded a plaintiff $145 million in a bad faith case against State Farm Insurance Company for failing to settle a claim in a timely manner.
You Have a High Burden to Meet in a Bad Faith Case
Parties to a contract are presumed to act in good faith unless you can prove otherwise. Bad faith cases have a high burden of proof to meet. Standard insurance company tactics do not always rise to the level of bad faith. They must do something incredibly wrong to be liable in a lawsuit.
You can take legal action if you believe the insurance company has broken the law. If you have filed a claim, you should immediately hire an attorney. If you need to sue, you should always have an attorney handle your case.
A New Jersey Insurance Lawyer at Herold Law, P.A. Will Get You Results.
If you believe an insurance company has wronged you, call a New Jersey insurance lawyer at Herold Law, P.A. Call us at 908-679-5011, or contact us online to schedule a consultation. Located in Warren, New Jersey, we serve clients in Somerville, Morristown, and across the state.
