Insurance Bad Faith Examples

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What Is an Example of Denying a Claim without Giving a Reason?

In Louisiana, an insurance company was found to be in bad faith when it did not pay medical expenses under a worker's compensation claim. No reasonable explanation was provided for the denial of the claim. The company's failure to pay the expenses in a timely manner was considered bad faith.

What Is an Example of Failing to Conduct a Reasonable Investigation?

A showing of an insurance company's disregard of facts or proof can support a claim of bad faith.

What Is an Example of Offering Less Money than They Know the Claim is Worth?

A title insurance company in California was found to be in bad faith because of its successive attempts to evade responsibility for its obvious negligence. The company failed to disclose about an easement on the insured's property. (See Title and Boundary Disputes.) When the insured discovered the easement, an appraiser estimated a loss of nearly $63,000. The insurance company first denied liability. It later offered to settle for a nominal amount. It finally conducted an appraisal of the loss but only after a court found it liable.

What Can I Recover if I Sue my Insurer for Bad Faith?

In addition to an award to cover your losses as a result of the insurance company's bad faith, some states also award punitive damages on your behalf. Punitive damages are awarded as punishment for the bad faith and are meant to discourage similar behavior in the future.

Do I Need a Lawyer to Help Me with My Bad Faith Claim?

Bad faith claims are often hard to prove and difficult to pursue. Additionally, the laws that determine what bad faith is vary from state to state. An experienced lawyer will know how to prove that an insurance company acted in bad faith, and properly evaluate the value of your case. A lawyer can also help you navigate through the complicated legal process if you need to bring a lawsuit.

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Last Modified: 12-04-2013 10:59 AM PST

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