An insurance company that improperly denies an otherwise valid claim for insurance coverage after a car accident could be liable for additional damages. Insurance companies are obligated to investigate claims and provide financial compensation based on the insurance policy/coverage terms. However, insurance companies are also for-profit entities and every claim they payout is less money for their managers and investors. Therefore, insurance companies are in a constant tension between protecting their policyholders and making money for their investors.
What is Bad Faith?
Bad faith is a legal term that means an insurance company denied a policyholder’s claim without a reasonable basis. Reasonable basis requires the insurance company to conduct a good faith investigation, review the policy and coverage terms, investigate the accident (i.e., collect witness statements, review the police report, evaluate the injuries and property damage, and other similar actions) to ultimately render a decision about whether to grant compensation and, if yes, to what extent.
The first thing a driver should do after an accident is to call a personal injury attorney to assist you. Insurance Companies are not your friends. They are not your good neighbor. You are not in good hands. Contact us for a free consultation at 702-529-1011 to make sure you are compensated for your losses.
Bad Faith Acts by Insurance Companies
Bad faith can happen in a variety of ways. Examples of bad faith acts by the insurance company include when the insurer fails to conduct a good faith investigation and denies coverage after a crash, refuses to pay a claim it owes, fails to process or pay a claim in a timely manner, requires unreasonable paperwork, or fails to defend the policyholder against a claim.
For instance, if an insurance company fails to review traffic camera footage and denies a valid accident claim, the insurance company failed to conduct a good faith investigation. Therefore, it may be liable for bad faith.
Recovering Damages in a Bad Faith Case
In addition to recovering what the insurance company should have paid for the valid claim, policyholders can recover consequential and punitive damages:
- Expectation Damages: the money they would have received if the claim was granted;
- Consequential Damages: costs incurred due to the denial;
- Punitive Damages: designed to punish the insurer for intentional wrongdoing.
To recover punitive damages in a bad faith insurance case, the victim must generally prove the insurer’s egregious conduct, not just that an incorrect decision was made. Once you contact us at Van Law Firm, we are going to be there for you throughout your entire case. That is why we pride our selves in guaranteeing that you pay nothing unless we win.
We hope you share this post on your social media so that your friends and family can get the help they need. We’re available 24/7, feel free to reach out to our staff at Van Law Firm at 702-529-1011 for a free consultation.