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Bad Faith Claim Primary Elements

Understand the primary elements of bad faith insurance claim

What Are the Primary Elements of a Bad Faith Insurance Claim?

A bad faith insurance claim can emerge in any situation in which a personal injury claimant argues that the insurance company has not handled the claim properly or fairly according to the state's guidelines. This happens, unfortunately, far more frequently than you might expect and it can come in numerous different forms.

Insurance companies are required to act in good faith from the moment that a policy holder submits a claim. This does not necessarily mean, however, that the insurance company must promise to pay out the claim. Not every case will meet the grounds for a bad faith claim. There are situations in which the insurance company may fully investigate your claim but later decide that there was no coverage or that the damage was minimal. This may simply be a result of their internal investigation rather than an attempt to purposefully make things difficult for you. The insurance company does, however, have specific obligations to you as a consumer when you retain a policy.

What Are the Responsibilities of the Insurance Company?

It is the responsibility to conduct a prompt and thorough investigation to keep you informed of how the case is proceeding and to comply if they have agreed to pay out a settlement in a reasonable fashion. Some of the ways that an insurance company can act in bad faith include:

  • Refusing to carry out an investigation.
  • Unfairly denying a claim.
  • Unreasonable delays in settlement payment.
  • Suddenly canceling the policy without reason.
  • Not keeping the claimant informed of the claim's status.

The Two Basic Elements of Bad Faith Claims

There are two primary elements that must be met in a bad faith insurance claim. The claimant is responsible for showing that the insurance company failed to act reasonably and that the claim itself was not fairly treated. The insurance company must have acted in an unreasonable manner with the handling of the claimant’s submission.

The insurance company must also have had knowledge that the claim was being mismanaged in an unfair manner. Oversights and mistakes, however, are not bad faith. The insurance company must have been purposely engaging in an activity with the attempt to deny you your rights.

What You Can Expect in a Typical Bad Faith Claim

In many of these cases, insurance companies will try to argue that the claimant also acted in an unreasonable manner when it came to attempting to resolve the case. They might argue that the claimant withheld information or falsify documents that did not allow the insurance adjuster to complete a proper investigation. Your lawyer can help you navigate this process as you fight for compensation due to a bad faith claim.

Make sure you do not proceed with a bad faith insurance claim, until you have had the opportunity to sit down with an attorney and talk over the major aspects of your case. This can help you to identify common problems and prepare yourself for the next step.

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