Bad faith claim denials occur when an insurance company treats claimants unfairly or in some way conducts business in violation of the principles of good faith. The bad faith can be by the claims adjuster or any person working for the insurance company.Unjustifiably denying a claim or offering significantly less than the value of a claim are just two ways insurance companies can be guilty of acting in bad faith. Every state has some law that asserts insurance companies have a duty to act in good faith with their customers and claimants. Any time an insurer intentionally fails to perform that duty of good faith, the injured party has reason to contact a bad faith insurance attorney to file the necessary legal actions to receive compensation.
Proving an insurance company’s bad faith
If an insurance company is guilty of bad faith it is still possible to reach a settlement agreement without filing a lawsuit. A bad faith insurance attorney can review the details of the case and advise injured parties of their best course of action. Bad faith on the part of an insurance company can take many forms. Any deceptive practices or deliberate attempts to misrepresent facts in order to avoid paying a claim is certainly bad faith. Injured parties should document all communications between the insurance company representatives and them. Insurance companies can also be guilty of more subtle violations of good faith. If they delay investigating or resolving a claim, they could be guilty of attempting to coerce an accident victim in need of money to settle for much less than the claim is actually worth. Any abusive or coercive tactic by an insurance company is bad faith conduct.
Keeping detailed records is important
An experienced bad faith insurance attorney can identify bad faith conduct on the part of an insurance company and which state laws apply to the situation. If a claim is denied by an insurance company, injured parties should request that the insurer put their reasons for denying the claim in writing. The insurance company may reconsider its denial simply because it is now creating a paper trail that may be used against it in a bad faith law suit. In the event a lawsuit is necessary, all communications such as emails, voice mails, and letters may be evidence. Injured parties should also keep notes of any face-to-face meetings with the adjuster and phone conversations with any insurance company representatives. A bad faith insurance attorney can advise victims of the necessary steps to report the bad faith conduct to the state Department of Insurance and if it is necessary to notify the insurance company in writing.
In order to win a bad faith lawsuit, the plaintiff may be required to show that the insurance company denied a legitimate claim and that the insurer had no reasonable basis for denying the claim. It may also be necessary to show that the insurance company had an actual or implied awareness that it had no justifiable reason to deny the claim.
Adjusters guilty of bad faith
Settlement tactics utilized by many claims adjusters often cross the line from fairly negotiating injury claims into the area of illegal conduct that makes the insurance company guilty of bad faith. Insurance adjusters must complete extensive training to become claims adjusters and are required to stay current on industry practices through continuing education. Their primary duties are to investigate accidents, determine an appropriate amount of compensation and report back to the insurance company as to the insurer’s liability. Claims adjusters also negotiate settlement claims with accident victims. Insurance adjusters and claimants both want claims settled quickly, but they typically have very different ideas about what is a fair and appropriate settlement.
Adjuster conflict of interest
Whether the adjuster is an independent adjuster who works freelance for several insurance companies or a full-time employee of one insurance company, they are working in the best interest of the insurance company to negotiate the lowest settlement they possibly can. Insurance companies are businesses that are driven by profits. Insurance adjusters who consistently make lower settlements obtain more work from the insurance companies and are in a better position to receive raises and promotions if they are full-time employees.
Bad faith damages
The compensation of a bad faith lawsuit case is not limited to the actual damages suffered by the victim. Awards can include punitive damages to punish the insurance company and serve as both an example and deterrent to other insurance companies. Just because an insurance failed to comply with the Nevada Insurance Code it does not necessarily mean the company is guilty of bad faith. How a case should be handled depends largely on the specific way in which the insurance company violated their duty of good faith.