Bad faith refers to dishonesty or fraud in a transaction, such as knowingly misrepresenting the quality of something being bought or entering into an agreement with no intention of ever living up to its terms. Insurance is, in essence, a contract; in return for premiums, the insurer agrees to indemnify and defend you if a covered event occurs, such as an auto accident. Thus, when an insurance company is accused of acting in “bad faith,” they have failed to act in a way that is required by the policy and have not fulfilled their obligations to the insured. However, not all disputes with an insurance company will be considered bad faith, and any insurer is allowed to question and investigate the claims being made against them.
There are a number of different examples of insurance bad faith claims. The following are just a few to help you determine if you may have this kind of a claim:
- Denying a claim without giving a reason. A Louisiana resident’s workers’ compensation claim was denied without any reasonable explanation as to why, and the company’s failure to pay in a timely manner was considered bad faith.
- Failing to conduct a reasonable investigation. Showing an insurance company’s disregard of facts or proof can support a claim of bad faith. A Nebraska insurance company failed to investigate the cause of a fire and without reason accused the insured of arson and denied their claim. The court determined the company acted in bad faith.
- Offering less money than what they know the claim is worth. A California title insurance company was found to have acted in bad faith when they failed to disclose an easement on the insured’s property and later denied liability for the $63,000 in losses.
Every state has its own established penalties for bad faith, and the laws for bad faith practices can be quite complex. An insurance company will likely do anything they can to deny liability and will have an attorney on their side, so it is crucial that you have representation as well. The insurance bad faith lawyers in Omaha of Cullan & Cullan, LLC can help you win your claim against the insurance company and get the compensation you deserve. We are also physicians, which can be advantageous in a claim against a medical insurance company as it can give us a better understanding of your case. For a free consultation, please call (402) 397-7600.