Insurance Bad Faith Cases: Hold Insurance Companies Accountable
Insurance bad faith refers to the failure of an insurance company to act in good faith and fair dealing when handling a claim. Examples may include denying or delaying a valid claim, failing to investigate a claim properly, and failing to provide a reasonable settlement offer. When an insurance company acts in bad faith, it can cause significant financial harm to the policyholder. Aspects to consider in a fad faith case are the elements that rise to the level of filing a claim, damages for recovery, and what you can do to avoid being a victim insurance bad faith. Under Florida State Statute 624.155, “bad faith is when the insurer does not attempt in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests; making claims payments to insureds or beneficiaries not accompanied by a statement setting forth the coverage under which payments are being made; or except as to liability coverages, failing to promptly settle claims, when the obligation to settle a claim has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage.”
Elements of an Insurance Bad Faith ClaimTo succeed in an insurance bad faith claim, the policyholder must prove the following:
- The insurance company was obliged to act in good faith and fair dealing when handling the claim. Examples of bad faith include not investigating the claim, misrepresenting the facts, not investigating claims promptly, and not communicating more information is needed.
- The insurance company breached that duty by denying or delaying the claim, failing to investigate the claim properly, or failing to provide a reasonable settlement offer.
- The policyholder suffered damages due to the insurance company’s bad-faith actions.
Types of DamagesIf an insurance company is determined to have acted in bad faith, the policyholder may recover damages, including:
- Actual damages: This includes any financial losses that resulted from the insurance company’s bad faith actions, such as the cost of repairing or replacing property, medical expenses, and lost wages.
- Punitive damages: These are damages to punish the insurance company for its bad faith actions and deter it from engaging in similar conduct in the future.
- Emotional distress damages: These are damages to compensate the policyholder for any emotional distress that resulted from the insurance company’s bad faith actions.
- Attorney’s fees: Policyholder may also be able to recover attorney fees incurred in pursuing a claim of bad faith against the insurance company.
Steps to Protect Yourself from Insurance Bad FaithTo help protect yourself from bad faith some step you can tak include:
- Review your insurance policy carefully to understand your rights and obligations.
- Document all communications with the insurance company and keep accurate records of damaged property repairs or replacements.
- Contact an attorney if your claim meets the definition of bad faith.
- Being prepared to negotiate with the insurance company, but also being prepared to take legal action if necessary.
- Be familiar with your state’s laws regarding insurance bad faith, as these laws vary from state to state.