Bad Faith Insurance Litigation
What To Do When an Insurance Company Acts in Bad Faith?
Incidents of bad faith between an insurance provider and the insured can make an already stressful situation even worse. Both the insured and insurer are expected to act in good faith and fulfill their ends of the contract when a policy is made. However, in some situations, there may be instances where a party chooses to play tricks or not stand by the policy terms, which commonly results in acts of bad faith. When this happens, policyholders may choose to engage in bad-faith insurance litigation. This post will explore some examples affecting an insured person and the possible paths to remedy their situation.
What Are Examples of Bad Faith
Some of the most common examples include:
- Misrepresentation of terms of coverage,
- Unnecessary delays in settling a claim,
- Wrongfully adjusting the claim, and
- The insurance company knowingly offering less than the correct coverage amount.
We have also outlined a few examples of the bad-faith claims we handle below.
Discriminatory Insurance Policy Decisions
Discriminatory insurance practices go against the principles of fairness and equality in the insurance industry. An example would be an insurance company denying a life insurance policy solely based on the applicant’s age or ethnicity despite meeting all other criteria. These decisions violate both legal and ethical standards.
Deceptive Insurance Practices
One example of a deceptive insurance practice is when an insurer advertises a policy covering “all accidents” but includes numerous hidden exclusions in the fine print. This can leave the policyholder feeling deceived and lead them to question other potential undisclosed terms.
In turn, these practices undermine trust in the insurance industry and can lead to inadequate protection.
Failure to Investigate a Claim Promptly or Thoroughly
If an insurer delays investigating a homeowner’s claim for a burst pipe for weeks, causing further property damage, they likely have acted in bad faith. This type of delay leaves policyholders in a state of limbo and can exacerbate the policyholder’s financial standing. It can also cause emotional distress, leading policyholders to lose faith in the system meant to protect them.
Unreasonable Denial of Payments
Health insurers that deny coverage for necessary surgery by falsely citing it as a pre-existing condition are likely operating in bad faith. Insurance companies that unreasonably refuse claims leave policyholders grappling with numerous negative consequences. In these situations, policyholders are right to question the fairness of their coverage.
Unreasonable Attempts to Offer Less Than a Claim Is Worth
Insurers employ tactics to “under-settle” that can leave policyholders feeling undervalued and disheartened during the claims process. For example, let’s say an insurer offers a policyholder $5,000 for a $20,000 theft claim, hoping they won’t know better and move on. This lowball offer is an example of bad faith that can leave the policyholder struggling to replace their stolen items.
Making False or Misleading Statements
Misleading policyholders about coverage can lead to devastating surprises when they attempt to file claims. For example, if a policyholder discovers floods are excluded from a policy after being assured otherwise, they can face financial burdens they hadn’t planned for, further straining their budget.
Insurance Company Threats
Imagine an insurance company threatening a policyholder with a fraud lawsuit for filing a claim if they don’t accept a low settlement offer. These intimidation tactics, which are unquestionably bad faith, intimidate policyholders, creating an environment of fear rather than cooperation. This threat can also magnify a policyholder’s trauma, causing sleepless nights filled with worry.
Illegal Use of Premiums
Suppose a policyholder discovered their insurance agent used premium payments for unauthorized purposes. Illegitimate handling of premiums harms policyholders by potentially leaving them without coverage and breaches an insurer’s fiduciary duty, leading to legal repercussions for the agent and company.
Non-renewal or Termination After a Claim
Non-renewing or terminating policies post-claim can leave policyholders feeling betrayed and vulnerable. Practices like this, drenched in bad faith, penalize policyholders for utilizing their policies and can feel like retaliation.
It is important to note that most bad faith cases contain different facts and circumstances. Therefore, it is crucial to provide all details for our licensed attorneys to evaluate your own situation so they can ensure your legal rights are protected. Remember, insurance companies have an interest to protect; we can defend yours.
If you have not experienced the insurance claims process before, it could be hard to identify an insurance company’s act of bad faith. Therefore, it is extremely beneficial to consult a bad faith insurance attorney who understands the tricks insurance companies play, but most importantly, to hold insurance companies accountable for their wrongful actions. Request a free evaluation and let our attorneys at Arias & Abbass help you.
What is a Civil Remedy Notice
After experiencing bad faith from an insurance company, you may feel frustrated and discontent at the company that let you down after such a significant life event. At that time, the homeowner can file a civil remedy notice with the Florida Department of Financial Services, stating the specific facts and statutes that give rise to bad faith. This process can be complicated as certain requirements must be met before a successful notice can be filed; however, to your benefit, at Arias & Abbass our team of attorneys have extensive experience in handling these exact issues and we are ready to help you.
The following elements are required for a civil remedy notice to be filed:
- Notice must be made on a form provided by the Department of Insurance;
- Notice must provide specific facts alleged in the violation;
- Notice must contain the specific language in the policy that relates to the violation;
- Notice must provide statutory provision that the insurance company allegedly violated;
- Notice must include the names of persons involved in the case; and
- Notice must contain a statement that it is given in order to perfect the right to pursue the civil remedy authorized by this section.
To ensure that this civil remedy is properly filled out and done in accordance with Florida Statute § 624.155, it is strongly advisable to have an experienced insurance claims lawyer assist you.
After the notice is filed with the appropriate parties, the insurance company will have 60 days to remedy the violation. If the insurance company corrects the violation and provides compensation or correction, the insured is prohibited from filing a bad faith claim.
If the insurer did not remedy the violation, and the facts and circumstances show that the insured still suffered from the actions of a bad faith actor at the end of the 60 days, the insured may file a bad faith lawsuit. If a court finds that the insurer was acting in bad faith, the insurer will also be responsible for court fees, attorney’s fees, damages, and potentially punitive damages to prevent the same behavior from happening in the future.
Contact Arias & Abbass and Let Us Be Your Attorneys
At Arias & Abbass, our attorneys have a depth of experience in handling bad faith insurance litigation.
Our attorneys understand and are skilled in identifying when insurance companies are acting in bad faith. We can use our skills and experience in handling civil remedy notices and litigation against bad faith to hold them accountable.
If you feel you are the victim of a bad faith claim adjustment and want to speak to a Florida bad faith insurance lawyer, please contact us today at (786) 530-4357 for a free consultation.