An insurance policy is a contract under which both the insured and the insurer have responsibilities. An insured has an obligation to cooperate with his or her insurance carrier, provide honest and complete information, and make timely premium payments. The insurance company has an obligation to act in good faith when handling a claim brought against the insured, whether it is a claim for property damage, medical or wage loss benefits, uninsured motorist, underinsured motorist or a liability claim. That duty of good faith includes paying claims timely and completely; providing the insured with a competent defense to claims; keeping the insured informed of all settlement overtures; and, most importantly, settling claims within policy limits if at all possible. In simple terms, if you pay the premium, the insurance company must pay the benefits if the conditions specified in your insurance policy occur.
When you purchase insurance – whether commercial or personal – you are entitled to the full benefits of the policy if you have a covered claim or one is made against you. Insurance carriers, however, all too often wrongfully deny legitimate claims, especially during a weak economy. If an insurance company refuses to pay or delays payment, you have a right to sue your carrier for coverage. If you win, your carrier is responsible for paying your damages, attorney’s fees, and court costs. If a claim is made against you and your carrier fails to properly defend you or resolve the claim within the limits of your policy, you have a right to sue your carrier for bad faith and could be entitled to damages, including interest, punitive damages, court costs and attorney’s fees. Finally, if your insurance broker or agent has failed to obtain appropriate insurance for you, you may have an errors or omissions claim against them.
The term “insurance bad faith” usually refers to an unreasonable or unfair conduct by an insurance company. Some examples of bad faith conduct by an insurance company include:
· Unreasonable denial or termination of an insurance claim that should have been paid;
· Unreasonable delay in making payments to the policyholder;
· Unreasonable failure to defend a policyholder who has been sued;
· Unreasonably failing to settle a claim that could expose to the insured to a judgment over the insured’s policy limits;
· Failing to advise the insured of settlement opportunities, risks, and benefits;
· Unreasonably attempting to delay, under-settle, or lowball the payment of a claim
Personal injury cases often involve insurance bad faith. If a person is injured and there is an existing liability policy or an uninsured motorist policy, the injured person should receive coverage and carrier should make every reasonable effort to settle the claim within its policy limits. However, sometimes the insurance company unreasonably delays payment of benefits, fails to provide coverage, or fails to settle the case within the limits of the insurance policy. When this occurs, the insurance company is acting in bad faith.
Homer Bonner Jacobs insurance coverage attorneys can help victims of insurer and broker misconduct seek the insurance coverage to which they are entitled. Our attorneys have extensive experience in insurance coverage, errors and omissions, and bad faith litigation. We have aggressively fought coverage denials for clients both large and small, from a teenage rape victim denied coverage for her injuries to a multi-million dollar telecommunications corporation denied coverage for a class action lawsuit.
If you or someone you know is being deprived of coverage they are due or has experienced insurance bad faith, contact us. One of our experienced insurance coverage attorneys will provide a free initial consultation.