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Ordinary Claim Denial and Insurance Bad Faith

More Information on Bad Faith:

 

Insurers sometimes have valid reasons for denying a claim; usually that the claim is not covered (or is specifically excluded) by the policy of insurance.  In other cases, while the claim may be covered, the insurance company may dispute the amount owed.  Such may be the case when there is a difference of opinion concerning the fair market value of a car that was totaled in an accident.

Hallmarks of Insurance Bad Faith

Insurance bad faith is different than a legitimate difference of opinion as to whether a claim is covered, or the amount that should be paid in respect of a claim.  While the facts and circumstances of every case will differ, certain hallmarks of insurance bad faith include the following:

  • A course of conduct centered around automatically denying claims.  If an insurance company trains its adjusters to automatically deny all claims and then only to consider claims if an insured disputes the denial, this may be an example of insurance bad faith. 
  • Seeking to prolong claims payout without any reason, especially in circumstances designed to place financial hardship on insureds so that they will accept a lesser amount.  In many instances, claims adjusters will recognize that an insured cannot go long without receiving compensation without severe financial ramifications (such as not being able to make mortgage or rent payments).  If a claims adjuster chooses to withhold payment until the financial circumstances of the insured become dire, this could be a claim of insurance bad faith. 
  • Failure to properly investigate claims.  Insurance companies cannot offer to make a payment that is significantly below the amount being claimed without adequate investigation and a fair basis for claim determination.  For example, in the case of totaled vehicle, a claims adjuster will need to make a reasonable investigation to determine the fair market value of the vehicle based upon similar vehicles being offered for sale in the marketplace.  If the adjuster fails to conduct any such investigation and the fair market value of a vehicle is worth significantly more than the offer made by the adjuster, this may constitute insurance bad faith..

In the State of Washington, it is up to a jury to determine whether a case of bad faith exists.  The more egregious the conduct, and the more that it appears that the wrongful acts were not isolated incidents and instead a repeated course of conduct designed solely to make money for the insurance company at the expense of those whom it insures, the more likely it is that bad faith will be found.  If a case for bad faith is found, then it will be up to a jury to determine the amount of damages to be awarded.

If You Believe that You Have a Case for Insurance Bad Faith, Please Contact Us

We can meet with you at your convenience for a free consultation and advise you as to whether we believe that a strong case for bad faith exists based upon the facts and circumstances of your case.  There is no fee for this meeting, and as we generally accept insurance bad faith cases on a contingency fee basis, no fees will be owed to us unless and until we recover for you.