What is Bad Faith in Regards to Insurance Companies?
In exchange for timely payment of monthly premiums, your insurance company has an obligation to provide coverage and handle claims fairly. What happens if their conduct doesn’t meet this standard of responsibility? Our New Orleans bad faith attorneys explain this concept and how to recognize the signs.
When Insurance Companies Deal in “Bad Faith”
As with all contracts, an insurance policy is governed by the implied covenant of good faith and fair dealing. Both parties to a contract have obligations to keep their word and avoid questionable means to dodge their duties.
An insurance company must process claims in a timely manner and comply with coverage amounts and other conditions set forth in the policy. If the company uses intentionally deceptive methods to avoid settling the claim, in whole or in part, they’re considered to be acting in “bad faith.”
First-Party vs. Third-Party
There are two basic types of insurance claims.
- First-party claims made by the insured party, usually involving a loss of either property or health.
- Third-party claims made against the insured party in liability cases, such as when a vehicle driven by the insured party strikes another vehicle.
Bad faith practices can occur in both types of claims.
Common Bad Faith Insurance Practices
The following examples are some of the more common bad faith insurance practices that have been encountered by our New Orleans bad faith attorneys:
- Failing to confirm or deny coverage or disclose policy limits.
- Delaying or outright denying a claim clearly covered by the insured’s policy
- Also, failing to conduct a prompt and thorough investigation of the relevant incident
- Making demands for extraneous and/or superfluous information
- Failing to provide a reasonable explanation for the outcome of a claim
- Lastly, failure to settle a claim within a reasonable time frame
Bad Faith Insurance Lawsuits in the News
- A high school track coach in Georgia received a $1 million settlement when the insurance company of the driver who struck her failed to meet a time limit on negotiations.
- A federal appeals court upheld a jury verdict for $7.1 million against an insurance company that delayed settlement in a trade disparagement claim against a corporate client.
- Lastly, a jury in Texas took only three hours to award $1.8 million after an insurance company knowingly made false statements and engaged in other deceptive behavior regarding a homeowner’s claim of hailstorm damage.
Our New Orleans Bad Faith Attorneys
Are you getting the runaround from your insurance company? Don’t suffer intimidation by ineffective agents or claims adjusters. We’ll cut through the red tape and also fight for the settlement you deserve.