Insurance companies are paid by their clients to provide a service. Insured individuals can therefore expect “good faith” execution of the terms of their contract with an insurance company. This good faith service means insurance companies are legally obligated to honor the terms of the insurance policy a client holds.
The client may be you or may be another individual involved in a personal injury claim. Regardless of who the insured individual is, an insurance company is always expected under the law to meet their obligations in handling insurance claims.
What Makes the Claim “Bad Faith”?
An insurance policy is pre-paid, legally binding the insurance policy provider to adhere to the terms of the policy. The insurance company therefore has a duty to review claims fairly and negotiate settlements in good faith as well.
An insurance company or insurance claims adjuster that fails to honor the legally binding agreement of an insurance policy in any way produces a “bad faith claim” scenario. The insurance company may be your own or may be the insurance provider of another person involved in your personal injury. Either way, when an insurance claims adjuster or insurance company acts in bad faith, you must be prepared to protect your own interests.
Bad Faith with Third Party Insurance Companies
A third party insurance company is not your own. They represent another person or entity, but are still legally obligated to handle insurance claims in good faith. For a bad faith claim scenario to arise with a third party company, the insurance claims adjuster must act egregiously in interfering with the processing of your claim.
A few examples of clear-cut bad faith actions on the part of a third party insurance claims adjuster include:
- Withholding evidence
- Intentionally “losing” or “misplacing” crucial documentation
- Witness tampering
If you believe a third party insurance agent has acted egregiously in handling or blocking your claim, you must consider hiring a personal injury attorney. Legal counsel will be necessary to “unblock” your claim and to potentially initiate legal action against the insurance company and/or claims adjuster.
Bad Faith with Your Own Insurance Company
When your own insurance company fails to honor the terms of the policy you hold with them, it is usually due to the actions of a claims adjuster and not to company-wide, authorized tactics. After all, an insurance company cannot stay in business long if they do not honor their policies with clients.
Bad faith issues with your own insurance may include a claims adjuster:
- refusing to speak with you or accept evidence from you
- not processing witness interviews or other evidentiary proceedings in accordance with company practices and policy terms
- failing to provide justification or an explanation for a settlement offer, especially when the offer is very low
Since the claims adjuster is likely responsible for creating a bad faith claim scenario, you must first address the bad faith concern with the adjuster. Bring up the concern in your next conversation with the adjuster. If this does not resolve the issue, consider putting the bad faith claim in writing. A formal complaint letter typically gets attention quickly.
Address your complaint letter to the claims adjuster. If your written complaint still does not illicit an appropriate response, you may wish to hire an attorney. A personal injury lawyer can intervene on your behalf and can potentially expedite a fair resolution to your claim.
You may even want to consider contacting an attorney before submitting a “bad faith” claim notice to the insurance company. Communications that are written and issued by legal representatives have a way of quickly resolving insurance claims.