Insurance coverage is a necessity in American life. Insurance policies and coverages exist for our homes, cars, businesses, and health. When we buy such a policy we enter a contract with the company in which they have the responsibility to cover expenses when an accident arises and we have the obligation to pay our premiums on time and update the company of any changes affecting the policy.
Both the company and the policyholder have a duty to communicate and engage in what is called “good faith” meaning not withholding relevant information or operating with any intent to defraud or deceive. When your insurance company fails to pay a valid claim because they failed to properly or fairly investigate the claim then you may be able to sue for a bad faith claim.
What Steps Can I Take in Dealing with My Insurance Company?
If you’re struggling with your insurance company over a bad faith claim, then make sure you first try the following:
- Know your policy and follow the procedures provided by the insurance company in filing a claim. Many claims are denied when the policy you have chosen simply does not cover the type of accident you are claiming or you failed to provide the appropriate documentation.
- Maintain written records of all correspondence between you and the insurance company while your claim is being processed and after it is rejected.
- Be persistent in your effort to get your claim paid. Always follow up even when the company fails to respond, get clarification of anything you do not understand, and request details of any denial.
- File an appeal if one exists within your insurance policy.
- Engage a legal professional when your efforts have failed.
What Kinds of Damages Can I Recover in a Bad Faith Claim?
If you are successful in a lawsuit against the insurance company for bad faith you may be entitled to multiple damages. The most basic of recovery should be what you would have been entitled to if the company had paid the original claim.
When Do Punitive Damages Apply?
Punitive damages exist in civil liability to deter bad faith dealings and other deceitful or fraudulent behavior. In bad faith claims, punitive damages exist to encourage insurance companies to fairly and properly investigate claims and make reasonable efforts to promptly pay meritorious claims when the policyholder files a claim.
Punitive damages only apply when the insurance company engages in egregious behavior that is typically fraudulent and intentional rather than just negligence.
Should I Consult a Lawyer?
If you believe your insurance claim was wrongfully denied, consulting a qualified personal injury lawyer can help determine if your case has merit and what potential recovery exists. They can also assist you in filing a lawsuit and represent you in court against your insurance company.