Insurance Bad Faith
Insurance companies have a legal duty to act in good faith to policyholders. This means they must pay legitimate claims fairly and without unnecessary delays, among other things. Unfortunately, insurance companies use their policyholder’s lack of knowledge regarding the law to pay less-than-fair settlements on claims or deny them altogether. If you’re getting the runaround from your insurance company on a legitimate claim, you may be the victim of insurance bad faith. The attorneys at Begam Marks & Traulsen, P.A., help hold insurance companies accountable and negotiate fair insurance payouts for their clients. Contact our office today to schedule a free evaluation of your case.
What Is an Insurance Denial on Bad Faith?
When you file a claim with your insurance company, whether it’s following a car accident or on your homeowner’s insurance policy, it must, by Arizona law, use good faith when evaluating your claim. In other words, it cannot find ways to escape its obligation to investigate and pay the claim, if applicable. Failure to properly investigate a claim or deny a claim without legal basis is bad faith. One of the most common reasons for lawsuits against insurance companies is unwarranted denials of claims.
What Common Tactics Do Insurance Companies Use to Deny Policyholders?
Insurance companies will use several tactics to deny a claim. Unbeknownst to policyholders, many of them are illegal. Some of the most common include:
- Failing to disclose important information to a claimant
- Failing to conduct an adequate investigation of a claim before issuing a denial
- Failing to pay a claim within a reasonable period or denying a claim altogether, as outlined by state law
- Failing to offer a fair settlement when liability is clear
- Failing to provide an explanation for a claim denial
- Failing to respond to a demand
Proving a Bad Faith Claim Denial
Under Arizona law (and in every other state), an insurer owes each policyholder a duty of good faith and dealing. Proving that your insurer acted in bad faith requires proving the following two elements:
- The insurer withheld benefits under the policy. In other words, first you must prove that you had an adequate claim under the terms of your insurance policy. You must also show that your insurance company denied this claim (usually with documentation from the insurance company).
- Second, you must show that your insurance company unreasonably withheld benefits. The courts will review the facts of your case and ultimately decide if the insurance company’s actions constituted bad faith in accordance with Arizona law.
What Damages Can I Recover?
Much like a personal injury case, you can collect damages for your material and immaterial losses following insurance bad faith. These include:
- Compensatory damages representing the true value of your claim and including medical bills, lost wages, and loss in earning capacity. It may also include your attorney’s fees for pursuing a bad faith claim.
- General damages include the pain, suffering, and emotional distress you experienced from the insurance company’s bad faith actions.
- In some cases, such as when an insurance company’s egregious conduct leads to additional pain or injury, you may be able to collect punitive damages from the defendant.
Keep in mind the statute of limitations, or time limits, for filing these claims. In Arizona, you have two years from the date of the action to file a claim.
Insurance bad faith claims can be difficult to navigate and require the assistance of an experienced attorney. Contact the Phoenix bad faith attorneys at Begam Marks & Traulsen, P.A., to schedule a free case evaluation today.