The term “bad faith” has a lot of weight in the personal injury world. When an accident occurs, people typically first file a claim with their own insurance company. Claims cost insurance companies money, something that most shareholders dislike.
While individual claims for personal injury may be small to large insurance companies, those small claims add up. At times, insurance companies improperly look for unjust ways to deny claims to maximize their profits.
When this happens and the insurer is breaching the terms of its contract, you may have a claim for bad faith against your insurer.
What is Bad Faith?
Like other legal terms, bad faith has a special meaning to attorneys and insurance companies. There are two different ways in which a bad faith claim may be litigated. The first kind of bad faith claim is what lawyers call “first party.”
First party claims occur when an insured is making a claim against his/her own insurance company. These cases may arise out of the insurer taking an unreasonably amount of time to determine/adjust a claim to avoid paying it.
For example, a hurricane causes tree limbs to put a hole in someone’s roof. This should be covered by homeowner’s insurance. The insured calls the emergency number within 24 hours, and the adjuster says that they will come by to check on repairs.
However, the adjuster never comes and never answers additional calls. This is likely a cause for a first-party claim for bad faith. Third-party bad faith claims are not against your own insurance company, but are against an insurance company who insures a person who injures you or your property.
Because this is not your own insurance company and you have not entered into an insurance contract directly with this insurer, you have less rights and legal remedies.
Talk with the Adjuster Using the Term Bad Faith
A first-party bad faith claim often begins with the adjuster. People pay for an insurance policy with the expectation to be protected in the case of an accident.
For example, if someone gets into an accident with an uninsured driver and makes a claim under their policy’s “Uninsured or Underinsured” coverage, their adjuster must look at the injuries and provided a reasonable settlement offer.
If the insured individual believes the offer should be higher and is questioning the reasoning behind the offer, but the adjuster can provide justification for the offer, then there is no bad faith.
However, if the adjuster refuses to give a reason or starts trying to bully the insured individual, they may want to say that they feel the insurance company is negotiating in bad faith and gauge the reaction of the adjuster.
A successful bad faith lawsuit can cost an insurance company damages above and beyond the amount of the initial claim.
What Is Needed to Prove Bad Faith
Trying to prove bad faith is more difficult than just making a statement. Therefore, hiring an attorney to help prosecute the case is important. Bad faith is generally a state by state issue.
In Arizona, bad faith is dictated in part by the Unfair Claim Settlement Practices Act. Claims of bad faith can go through the State Department of Insurance which helps to protect both the policy holders and insurance companies.
When considering a bad faith claim, the insured needs to consider whether the insurance company acted in a timely manner, conducted a reasonable investigation, failed to assign the claim, or tried to settle for an unreasonable amount.
Since some of the information for these claims is difficult to obtain and so many of the areas require expertise, it is important to have an attorney who will be able to help the victim use the right case law and reasoning to bring an appropriate claim for bad faith.
When someone has been injured, justice must occur for the hurt or damage that has been caused. Bad faith claims include a sense of having been betrayed.
Not only was the victim injured, but they paid for a service to protect themselves and are owed a “duty of good faith and fair dealing”. The concept of punitive damages when someone has been intentionally harmed may be appropriate.
Call Yearin Law Office Today
If you or a loved one have been injured and had a claim unjustly denied, we invite you to give Don Yearin at the Yearin Law Office a call at 480-526-9386 or contact us online for a free initial consultation.