What Is Insurance Bad Faith Claim?

When you are injured in an accident, you expect your insurance policy, that you have so diligently paid your premiums for, to cover your losses and make you whole. However, too often this expectation does not become reality, as insurance carriers are quick to deny claims, fail to pay the true value of claims, or delay payment on the valid claims for months or years.

If you suspect that your insurance company is acting in bad faith to provide you the coverage or defense specified in your insurance policy, you may be entitled to file a bad faith claim against your carrier.

Common Reasons For a Bad Faith Claim

An insurance company is a contract whereby the carrier promises to provide the insured monetary coverage in the event of a catastrophic accident in exchange for the insured paying a premium on time.

When the insurance carrier breaches this contract, the insured may be entitled to a file a bad faith claim. There are a myriad of ways an insurance company can act in bad faith, including:

  • Failure to pay a valid claim
  • Failure to properly defend the insured against lawsuits
  • Failure to settle within the stated policy limits
  • Failure to settle a claim in a timely manner
  • Advising a claimant not to hire an attorney
  • Misrepresenting the facts or policy provisions

Remedies for Insurance Bad Faith

You may be entitled to a number of different remedies if your insurance company has committed bad faith. One of the main remedies you may be entitled to is the amount of benefits due under your policy plus interest. This damage is available under a breach of contract theory.

The best way to set up a company that is acting in bad faith is to give it every opportunity to do the right thing. Don't hide the ball and hope they will commit bad faith. Give the claim reps all of the facts, tell them of the applicable law. Ask them to reconsider. Ask them to do the right thing. If they do the right thing, that's great.

You may also be entitled to the consequential economic losses, emotional distress and attorney's fees. Another type of damage that is available in bad faith claims is punitive damages. In order to seek punitive damages, your auto accident attorney orange county must show that your insurance carrier acted with fraud, oppression or malice.

Atul Chaudhary Photo To schedule a complimentary consultation with an experienced auto accident attorney in Orange County at Law Offices of Samer Habbas

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