Insurance is a vital safety net, providing financial stability that protects you and your loved ones when an accident or tragedy strikes. When an insurance company doesn’t behave ethically and demonstrates bad faith, Attorney Bryan Garrett can help.
What Are Bad Faith Insurance Claims?
An insurance policy is a contract. You pay monthly (or regular) premiums in exchange for benefits that the insurance company promises. The benefits could include property repair, property replacement, or cash disbursements.
On occasion, you and your insurance company might disagree about what level of support they should provide. It’s not unusual to negotiate with a claims adjuster if you disagree with what they’re offering, but things get complicated when your insurance company acts “unreasonably”, resulting in a failure to pay your claim.
Unreasonableness can manifest in several ways, and there can be a fine line between what is permissible from a contractual standpoint (remember, insurance companies are in business to make money) and what is ultimately a failure to pay a legitimate claim.
When an insurance company crosses the line and breaches its implied covenant of good faith and fair dealing by acting unethically, it may constitute bad faith. In general terms, bad faith may be described as “dishonest dealing.”
Examples of an Insurance Company Acting in Bad Faith
If an insurance company has done any of the following actions, it may be liable for acting in bad faith:
– Negligent acts by the insurance agent
– Unreasonable denial of a valid claim
– Undervaluing a claim
– Delaying claim resolution
– Misrepresenting your coverage and the benefits due
– Fraudulent policies
– Failure to investigate a claim or file paperwork by a deadline
– Instigating a lawsuit as a delay tactic
– Not defending third-party claims
– Failure to disclose material policy information
– Enforcing unreasonable, arbitrary deadlines
– Colluding with doctors and other experts to reduce a settlement
– Forcing a beneficiary to sue in order to recover money that’s due
Types of Insurance that May Warrant a Bad Faith Claim
Any insurance policy has the potential for bad faith failure to pay, including:
– Auto insurance
– Life insurance
– Homeowners’ or renters’ insurance
– Health insurance
– Pet insurance
– Travel insurance
– Long-term disability coverage
– Umbrella insurance
– Commercial property and liability insurance
– And more
A $145 Million Bad Faith Insurance Claim
Because insurance companies have a duty to act in good faith and the bulk of society relies on their support for essentials such as health, transportation, and housing, a breach of trust and honest dealing can carry heavy consequences.
State Farm Insurance learned this lesson the hard way when they lost a lawsuit in 2003, and the jury awarded the plaintiff $145 million in punitive damages. What did State Farm do to deserve this ruling?
In a nutshell, one of their policyholders caused an accident that resulted in another person’s death. Instead of settling, State Farm decided to go to court and prevented its customer from getting his own lawyer. When State Farm lost the case and the policyholder was on the hook for a six-figure amount, the insurance company backed out of the agreement to pay the victim’s family. The policyholder sued for bad faith and won.
Examples like the one above are, unfortunately, common, and when you’re dealing with a stressful event, it can be a challenge to detect an incidence of bad faith. However, if you suspect something doesn’t feel “right,” you can contact an attorney to discuss the situation.
How Much Can You Recover in a Bad Faith Claim?
There’s no single answer here, but the state of Oklahoma has a vested interest in keeping its residents safe from unscrupulous insurance companies and agents. As such, victims may be able to recover compensation in these areas:
- The amount of your original claim
- Financial losses, including lost wages, bills, and related expenses
- Emotional distress
- Punitive (punishing damages)
Punitive damages are designed to be a significant deterrent. Their effect is to hit a bad faith insurance company where it hurts – their bottom line. High punitive damage costs also serve as a deterrent.
For example, if an insurance company’s behavior was particularly abhorrent, the court may find that the statutory maximum of $500,000 is not sufficient, and the damage award could be seven figures or more. When the court deems conduct particularly abominable, the punitive damage award could be theoretically unlimited.
Contact Bryan Garrett to Discuss a Bad Faith Insurance Claim
If you suspect that an insurance company has acted in bad faith, contact an attorney right away. Attorney Bryan Garrett is an advocate for Oklahoma residents who have received unfair settlement offers or had their claims unfairly denied or mishandled.
With over 15 years of experience, Bryan Garrett and his team have assisted clients in a wide array of situations. Contact us today for a free consultation.