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Bad Faith Insurance Claims Lawsuit Against Insurance Company

Bad Faith Insurance Claims Lawsuit Against Insurance Company
Bad Faith Insurance Claims Lawsuit Against Insurance Company

When people sign a contract, there is an unwritten agreement that both parties must act not only in the interest of oneself, but the other party’s as well.

Even though it’s not explicitly stated in writing, this legal implication bars both parties from doing anything that may hinder each other from obtaining the expected benefits of signing the agreement. Should one of the parties involved act in a way that violates this implied agreement, they may be held legally liable for violating the contract.

This implication is called “good faith and fair dealings” or simply, “good faith.”

Bad Faith Insurance Claim In The Context Of Personal Injury…

When people pay for their insurance premium, they are then entitled to certain services from their own insurance.

Whether it be uninsured motorist or property damage coverage, insurance companies have a duty to compensate their policyholders adequately should the need arise.

When insurance companies have been found to act maliciously and in “bad faith” it is typically because they have been acting in a manner that best suits them and not their client. In essence, they are attempting to satisfy their own greed. In these cases, they prey on their own policyholders’ lack of legal knowledge to not fulfill their end of the bargain.

This greed manifests in various ways, specifically in the alleged insurance violations stipulated in first-party bad faith claims and third-party bad faith claims filed by the defendant.

Suing An Insurance Company For Bad Faith

First-Party Bad Faith Claims

First-party bad faith claims are filed by the insured against their own insurance. In this scenario, the insured usually alleges that their own insurance is not fulfilling their responsibility as insurers — they’re acting in bad faith.

Insurance companies usually demonstrate this by:

  • Conducting an insurance investigation improperly (refusing to chase down witnesses, being selective over which facts to highlight, ignoring their insured’s account of events, etc.)

  • Refusing to reasonably compensate the policyholder (low-balling their insured, ignoring future care recommendations, disregarding their insured’s pain and suffering)

  • Stalling investigation while trying to build a case against their insured.

When the insured files a first-party bad faith claim against their own insurance, it’s usually under the context that the insurance company is not willing to apply the insured’s uninsured or underinsured motorist coverage, thus leaving them to foot the bill for property damage and personal injury.

Third-Party Bad Faith Claims

Third-party bad faith claims are not as straightforward as their counterpart and can be incredibly difficult to argue. The stakes are a lot higher here for two reasons.

First is that the limits are often “popped open,” meaning that the settlement is no longer limited to the maximum amount of the insured’s policy limits.

Second, bad faith claims of this nature are usually filed by a “third-party,” or a person that is not the insured. A case like this occurs when the insured is at fault and has to use their own insurance to compensate the victim for bodily injuries and/or property damages. But acting in “bad faith,” the insurance company does not fulfill their duty as insurers to adequately compensate the victim. Instead, they resort to:

  • Stalling investigation as means of withholding the victim’s settlement money

  • Making an offer that is significantly less than what the victim deserves

  • Punishing the insured unjustly

Call Omega Law Group

We have represented clients who have been affected by various personal injuries, including Spinal Cord Injury, Traumatic Brain Injury, Soft Tissue Injury, and many more. Our awards and excellent testimonials are a result of our ability to empathize and attend to the needs of our clients. Here at Omega Law Group, you will come first.

If you or a loved one is suffering due to an accident, reach out to our team. Visit our Contact Us page or call us at 866-942-3881.