Victims Should Look Out For Insurance Companies That Act In Bad Faith

It is just a fact of life that insurance companies are in business to make money. If they just pay everybody who is injured, they would go out of business (at least, according to them). So, the business model for the typical insurance company is to deny claims, or make it as difficult for a victim to recover damages, as possible.

That’s standard. But sometimes, the insurance company is so difficult, so unreasonable, and so ridiculous, that it can be said to be acting in bad faith. When an insurance company acts in bad faith, a victim may have the option of getting a significant damage award.

What is Bad Faith?

While an insurance company can fight you, deny your claim, or disagree with you, it must act at all times, in good faith. Bad faith asks whether an insurance company does things simply to delay your claim, deny you just to make things difficult for you, or where the insurance company acts in a way that nobody would reasonably act.

Bad Faith Example

Let’s say, for example, that a victim was paralyzed in a rear-end car accident. There is only a $10,000 insurance policy. Liability is clear—there is a presumption of liability in a rear end accident—and the damages are catastrophic; paralysis victims often incur hundreds of thousands, if not millions in damage awards.

There is simply no doubt: under any analysis, the victim in this case has incurred way, significantly more in damages than the $10,000 policy.

But instead of tendering the policy, the insurance company plays games. It asks for more and more information. It says it needs to “investigate” further, even after it’s been given all relevant information.

The insurance company knows full well the value of the claim, and it doesn’t need any more information even though it is pretending that it does. The insurance company is just acting in bad faith, by its refusal to tender the policy.

Collecting Damages

One big benefit to a bad faith claim, is that it allows a victim to collect the full amount of his or her damages from the insurance company, even if that dollar figure exceeds the amount of the insurance policy. The victim is no longer limited to collecting only the amount of the insurance policy.

There are two parts to the bad faith claim. The first part is getting the judgment against the Defendant in the first place. In other words, the baseline amount of damages the victim has suffered, must first be established.

Once that is done, the insurance company and Florida Department of Insurance are notified, and the victim can then proceed against the insurance company, to collect the additional damages that exceeded the limit of the policy.

Contact the Tampa personal injury lawyers at Barbas, Nunez, Sanders, Butler & Hovsepian today. Schedule a consultation today for help with the insurance company in your injury case.

Sources:

findlaw.com/hirealawyer/choosing-the-right-lawyer/what-is-bad-faith-insurance-law.html

investopedia.com/terms/b/bad-faith-insurance.asp