After a car accident, people are told to call their insurance company. People buy insurance so that they can be protected should something bad happen.
Sometimes, however, the company that should be protecting them becomes the adversary. When the insurance company makes the claims process too difficult, then the company may be acting in bad faith.
What Is Bad Faith?
The basic definition of “bad faith” is dishonest or unfair practices. The problem is that determining what actions are unfair or dishonest can be difficult.
Bad faith might be something as simple as denying payment without providing a reasonable basis for the denial. It can also be taking too long to make a coverage decision. Sometimes bad faith comes in the form of the insurance company ignoring policyholder communications.
Sometimes bad faith is more egregious. If an insurance company starts to send letters that use inappropriate language attempting to threaten or intimidate, then that is also bad faith.
What Can Policyholders Do To Protect Themselves?
As with everything else in the legal field, documentation is the best way to prove bad faith. All calls to the insurance company should be clearly documented. This includes date, time, claims adjuster name, and contents of the conversation. It also helps to send an email follow up after the conversation to show that the adjuster was made aware of the conversation in writing.
More important than conversation documentation is making sure to document any negotiations. Sometimes, an insurance company will try to make the negotiations seem fair to hide the fact that they are really acting in bad faith.
This means that all communications –written, electronic, or voice–should be clearly documented and include details about offers and counteroffers.
Additionally, the policyholder has the right to ask for written documentation by the claims adjuster detailing the reasoning for all decisions made. If the adjuster refuses to provide those details, the next step is to send a letter requesting this information.
The policyholder should make sure to send the letter using certified mail, return receipt requested. The reason for doing this is that the return receipt acts as documentation of delivery so that the insurance company cannot argue that the letter was lost in the mail.
What Are The Steps To Filing A Report With The State Insurance Board?
Every state has a state insurance board. These are regulatory agencies that help protect the policyholders. While they cannot force the insurance company to act fairly, they do investigate claims filed by consumers.
These investigations can help identify and/or provide evidence of bad faith. If the board finds evidence of bad faith, then they can fine the insurance company.
Since the state insurance board cannot compel the insurance company to act differently in individual cases, hiring an attorney is an important part of the bad faith legal process.
What Can An Attorney Do?
The legal process is convoluted. When it comes to insurance companies and bad faith, one of the most difficult aspect is interpreting the policy language. Some of the policy language has been interpreted and defined by court decisions adjudicating other lawsuits. Hence, having an attorney can help.
An attorney can determine when the insurance company has committed bad faith. Sometimes, what seems like unfair dealing to the policyholder is well within the insurance carrier’s rights. Having an attorney often makes the insurance company take the policyholder’s concerns seriously. Since an attorney is well-versed in not just negotiation but also the legal proceedings accompanying a bad faith claim, the insurance company is more likely to negotiate in a fair manner.
What Are The Outcomes Of A Bad Faith Suit?
Policyholders should understand that if their claims have been inappropriately denied or delayed, the insurance company may be forced to pay more money than just the original claim. Because bad faith means that the insurance company is abusing its power,the courts may add additional penalty damages or award attorney fees.
Call Yearin Law Office Today
If you or a loved one have been injured in a car accident, give Don Yearin at the Yearin Law Office a call at 480-526-9386 for your free consultation.