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How to Determine Bad Faith Insurance

The rite of passage into adulthood is full of moments when kids get to act like adults. One such moment is when two kids mimic adults in the consummation of a business agreement.

“I’ll let you have my basketball if you return it on Friday.” The two kids shake on the deal, but the kid getting to use the basketball placed his left hand behind his back with his fingers crossed.

Two weeks later on a Friday, the kid’s friend returns the basketball.

“You didn’t say which Friday.”

Humans have made bad faith business deals since the first caveman walked back a deal concerning the trading of weapons. The Merriam Webster dictionary defines bad faith as “lacking in honesty when dealing with other people.” Insurance agents and adjusters are not immune from making bad faith insurance deals.

How to determine bad faith insurance requires the legal expertise of an experienced insurance dispute attorney. At Morgan & Morgan, we have helped clients get their insurance companies to uphold their end of a business agreement. Insurance companies have plenty of financial resources to hire the best litigators to defend bad faith insurance charges.

You deserve the same level of legal expertise, and then some.

Discover how our more than three decades of experience can help you get on the same legal playing field with your insurance company. Schedule a free case evaluation to learn how to determine bad faith insurance, as well as determine the best course of legal action.

What Is Bad Faith Insurance?

How to determine bad faith insurance starts by defining the legal term.

Insurance companies regardless of what they cover have the legal responsibility to uphold the commitments listed in a policy. Whether you are covered by a car, life, or health insurance policy, you pay a monthly premium that keeps the policy in effect. Because you pay your premiums every month on time, you expect your insurance company to follow the terms of the policy and pay for any claims you submit.

If your insurance company turns its back on you when it comes time to pay up, the company has committed an act of bad faith insurance. However, disagreeing with your insurance company does not get you the justice you deserve. With the help of an insurance dispute lawyer, you must prove your insurance company committed one or more acts of bad faith insurance.

What Is First-Party vs. Third-Party Bad Faith Insurance?

One of the first items on an insurance dispute attorney’s to-do list during a free case evaluation is to decide whether your case is a first-party or a third-party bad faith insurance case.

A first-party bad faith insurance claim involves a policyholder insisting his or her insurance company did not cover the damages the insurer should have covered. Plaintiffs file a lawsuit that requests compensation to pay for damages.

Third-party bad faith insurance claims bring a second insurance company to the table. Your insurance company fulfilled its legal obligations, but the other party’s insurance company did not. The policyholder has the right to sue the third-party insurance company for monetary damages.

A third-party bad faith insurance case might include an investigation that either concealed or accidentally lost valuable evidence.

What Is My Insurance Company Legally Obligated to Do?

Insurance companies have several legal obligations they must meet. Failure to meet the legal obligations can lead to the filing of a civil lawsuit.

Investigate Your Claim

Your insurer might claim it conducted a thorough review of your claim, but instead, the company simply moved your case from the “to be investigated” pile to the “concluded investigation” pile. One or more insurance investigators must evaluate each piece of evidence that you submit. For example, if you filed a car accident claim, your insurance company is legally responsible for reviewing the official police report, examining photographs of the crime scene, and interviewing witnesses that confirm your version of events.

Settle a Claim With a Third-Party

If you caused an auto accident that produced injuries and property damages, your insurer must pay a settlement or a legal judgment to the plaintiff. The amount of money paid to the plaintiff depends on your insurance policy limit. Failing to pay what an insurance company is legally bound to pay is one of the most common types of bad faith insurance.

Present a Reasonable Settlement Offer

Negotiating a settlement with you or a third party saves everyone involved both time and money. Litigating bad faith insurance cases can take months or even years because of a crowded judicial docket and/or the complexity of your case. During the time you wait for litigation to begin, your attorney can try to negotiate a settlement with the other party’s lawyer. The key is to make a reasonable settlement offer, not offend the other party by proposing a ridiculously low settlement.

Responsive Communication

Your insurance company should respond to you in a timely manner. Waiting days for an answer to a question or a response to a concern is irresponsible at best and unlawful at worst. Insurance companies have the legal obligation to respond to policyholder inquiries within a reasonable amount of time. Waiting more than a week for a response to an email question is unacceptable.

Describe Why the Insurer Denied Your Claim

If your insurance company denies a claim, you have the right to know why. Sending you a letter with just the word “Denied” typed at the top of your claim does not cut it legally. You deserve a detailed explanation of why your insurer denied your claim. Reasons for denying an insurance claim include lack of evidence and your policy does not cover what you asked for in the claim.

How to determine bad faith insurance not only involves discovering acts of bad faith. It can also include your attorney discovering your insurance company committed an act of bad faith insurance on purpose. If that is the case, your insurance dispute attorney can argue that you deserve compensation for punitive damages.

How Do I Determine Bad Faith Insurance?

When an insurance company denies a claim, it might have made a wrong decision according to your insurance policy. The company also might have made the wrong decision in bad faith.

When an insurance company acts in bad faith, it costs the policyholder money. To get the compensation you deserve, you should learn the common types of actions that constitute bad faith insurance.

  • Intentionally changing or making an incorrect analysis of the data
  • Refusal to defend a reasonable lawsuit
  • Failing to negotiate a fair settlement
  • Delaying payments
  • Disrupting the investigation into your claim
  • Not reimbursing you for the full amount of your claim
  • Purposely making wrong interpretations of your policy’s legal language
  • Failure to conduct a comprehensive investigation into your claim
  • Denies your claim without providing a reason

If your insurance company fails to comply with the terms written into your policy, then the company has committed a breach of contract that can lead to a judge holding your insurance company legally accountable.

Why Do I Need a Bad Faith Attorney?

Winning an insurance dispute on your own is not likely. Your insurance company has a persuasive team of attorneys ready to contest your arguments. One of the most important reasons to hire an experienced insurance dispute lawyer is to even the legal playing field with your insurer.

Your attorney will know how the court interprets the bad faith laws on the books in your state. After examining the evidence, a highly-rated insurance dispute attorney determines the likelihood of you winning your case based on the evidence presented to the court. Finally, your lawyer calculates how much money you should receive in monetary damages.

The court might award you the amount of your insurance claim, plus compensation for punitive damages, as well as pain and suffering.

How Do I Choose a Bad Faith Insurance Lawyer?

When the Yellow Pages ruled the world of marketing, the section devoted to attorneys represented the largest section of the telephone book. Now, insurance dispute lawyers must rely on technology to get the word out about their legal services. However, there is one old-school way for you to find the best attorney for your case.

Review Attorney Websites

A lawyer’s website can tell you a lot about the attorney in terms of experience and area of expertise. You want to work with a bad faith insurance lawyer who has compiled several years of litigating cases. Any attorney under consideration must specialize in handling insurance dispute cases as well. Make sure an attorney under consideration clearly lists legal fees and describes the process for litigating bad faith insurance cases.

State Bar Association

Virtually every state has created a huge database that lists lawyers by specialization. Visit the page devoted to finding a lawyer, type in a few keywords into the search engine, and off you go in pursuit of an insurance dispute attorney. You also should discover whether a lawyer has received a reprimand for misconduct.

The last thing you want is to work with an unethical insurance dispute attorney.

Network Like a Pro

Networking remains an effective strategy when searching for the right legal representation. Ask friends and family members for recommendations of attorneys that specialize in litigating bad faith insurance cases. If you strike out close to home, expand your network to include neighbors and professional peers. Asking an attorney for a referral can lead you to the right legal counsel as well.

Schedule a Free Case Evaluation With an Experienced Attorney

How to determine bad faith insurance includes reaching out to a lawyer who has experience handling insurance dispute cases. Your attorney will review your insurance policy before deciding whether your insurer has honored every clause written into it. At Morgan & Morgan, our insurance dispute lawyers handle every type of bad faith insurance case.

Learn more about how we can help you by scheduling a free case evaluation.

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