It is not uncommon for drivers to pay car insurance premiums for years or even decades without ever having any sort of vehicular mishap. In fact, many individuals can begin to feel resentful as they continue to pay their premiums on time without ever receiving any benefit for the service. This can all change in an instant, however, if the unthinkable happens and you find yourself in a motor vehicle wreck.
Contacting your insurance carrier should be comforting and let you breathe a sigh of relief during a stressful time in your life, right? Unfortunately, not always.
What is insurance bad faith?
It is crucial to remember that an insurance company is a company that only remains profitable when they can stimulate a positive cash flow. This means, essentially, they are in the business of bringing in cash rather than paying it out. While this isn’t a guiding principle, an insurance company – even subconsciously – will act to protect their bottom line. This could mean delaying, devaluing or denying a claim that should be paid out.
It can be said that a company is acting in bad faith if they fail to act reasonably in processing, investigating or paying the claim. This can be expanded upon in two points.
- Benefits due under the policy were withheld: By establishing you had a valid claim under your policy, you might be able to prove bad faith. Additionally, written documentation that your claim was denied can be a crucial factor in your lawsuit.
- The reason for withholding benefits was unreasonable: This is an element that must be proven beyond the act of mere negligence. Did the insurance company evaluate the claim objectively? Was the claim rejected based on the facts at hand rather than a preconceived notion?
Insurance companies have decades of experience serving two financial directives: help the client and protect the bottom line. For this reason, they have become adept at hiding bad faith decisions in the shadows or under a mountain of paperwork. As soon as you question your carrier’s motives or you feel you might be being led astray, it is wise to discuss the situation with an experienced lawyer.
