Insurance Bad Faith

We like to call these cases “insurance companies behaving badly.” It sounds so much more respectable than “insurance companies cheating you.” And yet, even though these companies know better, they still behave badly. Why? For the money.

Everyone reading this can immediately think of their favorite insurance company jingle, slogan, or commercial: some involving cute talking animals or kids, and some which empower you to go out, live your best life and be the best person you can be (healthy, thin, funny, etc.). Yet none of those commercials addresses what really happens on the day when you or a loved one really need your insurance company to be there for you – and it turns out, unlike the commercials, the insurance company has 1,001 excuses why they just cannot possibly be there for you. So what happens when insurance companies stop trying to sell you and start getting real? Things often get bad, really quick.

We all know we need insurance: health, automobile, home, and life. Insurance companies, and their products, are supposed to provide financial security in the event of something going wrong. When you purchase insurance, you transfer the cost of a potential loss to the insurance company, in exchange for you paying them a fee, also known as the premium. For example, your car insurance provides you with financial assistance if another driver causes an accident that results in damages to your car. Your homeowners’ or renter’s insurance would also provide financial assistance if something happened to your home or apartment (through no fault of your own).

However, insurance companies, like most companies, must be self-interested, or else they could never be successful. In other words, they are in the business of making money, and unfortunately, sometimes, the business of making money makes insurance companies behave badly. For example, it is often in the insurance company’s best interest not to pay the policyholder, or to pay them as little as possible.

But insurance companies also always owe a duty of good faith and fair dealing towards their policyholders. If you believe your insurance company has behaved badly and not acted in your best interest, you may have a claim against it for what is called “insurance bad faith.” And, if that is the case, you could be compensated an amount larger than the original face value of your policy. If you believe you have not been paid what you are owed under any type of insurance policy, First Law Strategy Group can help. Our attorneys have years of experience in this type of litigation and have secured multi-million-dollar awards and settlements for our clients.

How do you know you have a bad faith claim against your insurance company? The following are examples are types of behaviors that may indicate you have a claim:

  • Your insurance company has no reasonable basis to deny your claim but does so anyway.
    • This is the most common type of claim, but it may not be so obvious to you. For instance, the company might cite to a complex portion of the insurance contract; or may use complex terms to describe their denial.
  • Your insurance company wants to settle for less than what you believe you deserve under your contract.
  • Your insurance company requests excessive paperwork from you (which you provide); and still denies the claim.
  • Your insurance company refuses to properly investigate your claim in a timely manner; or demands excessive paperwork from you.
    • It is always in an insurer’s best interest to delay, as the longer they take to investigate your claim, the less patience you may have. You may feel like you will just take whatever they can get, because you want to get the repairs done quickly. Hint: insurance companies know that most people do not have the time nor inclination to fight “City Hall.” And they view themselves as “City Hall.”

Confronting, and winning, against insurance companies in court is difficult, as insurance laws vary from state to state and contain many nuances. However, if you think your insurance company has behaved badly towards you or you just feel as something is “off,” the experienced attorneys at First Law Strategy Law Group can help.