State and federal laws obligate disability and life insurance companies to treat every policyholder fairly and to act in good faith. If your insurance company is not treating you fairly, or if it is acting unreasonably and in bad faith, you will need the advice and services of a California insurance claims attorney. You may need to take legal action against an insurer and it will be critical that you consult with the best and most experienced life and disability insurance attorneys you can find.
How is insurance bad faith defined? If an insurance company does not meet its legal obligations to you, what are your rights? What steps can you take? If you will keep reading this article discussion of insurance bad faith and your rights, you may find some of the answers you need.
What is Insurance Bad Faith?
Your insurance policy is a contract and a pledge that it will pay your covered claim expeditiously and fairly. It is your insurance company’s commitment to provide coverage when you require it. If you are paying for a life, accidental death or disability insurance policy, the insurance company may have the legal duty to provide coverage and to negotiate in good faith any claim you submit.
When your insurance company violates what is known as the implied covenant of good faith and fair dealing implied in all life and disability insurance policies, by for example unreasonably denying your life or disability insurance claim, you have the right to file a lawsuit to recover what the company owes you. This may include not only contract damages, but also extracontractual damages, such as emotional distress, consequential damages and punitive damages. Insurance bad faith includes but is not limited to an insurance company’s failure to:
- pay a claim in a reasonable amount of time
- offer a settlement figure that represents the claim’s actual value
- pay or negotiate a claim, or clarify the reason for rejecting it
- reasonably investigate a claim
- use a non-biased expert who evaluates the claim
- follow reasonable claim standards
When Should You Contact a Life or Disability Insurance Claims Attorney?
By itself, a reasonable disagreement about the value of your life or disability insurance claim is not bad faith, but if the insurance company has not treated you fairly, has not negotiated with you in good faith, or fails to pay a claim within a reasonable amount of time, then you should take the case to a life, disability or accidental death insurance claims lawyer.
A fight with an insurance company is the last thing that a seriously ill person or a disabled person needs. If your claim has been denied – or ignored – and you believe that an insurer has acted in bad faith, you may have to take legal action to recover your damages caused by the insurer denying or ignoring your life, accidental death or disability claim. .
How can you know if your insurer has acted in bad faith? Schedule a consultation with a California life or disability insurance claims attorney. That attorney will review your situation and help you determine if filing a lawsuit is the best way for you to proceed.
How Will Your Life or Disability Insurance Lawyer Fight on Your Behalf?
A California life and disability insurance claims lawyer will investigate your claim of bad faith and your insurance company’s practices, policies and procedures. That attorney will file a lawsuit against the insurance company and then conduct discovery, such as taking depositions of the disability or life insurance claims representative or other representatives of the company or may subpoena one of those parties to testify in court.
Your attorney may also hire appropriate experts, such an experienced life or disability insurance claims expert that will provide a report about the insurer’s bad faith and/or to testify about the insurance industry’s procedures, standards, and practices.
How Do You Prevail With an Insurance Bad Faith Claim?
Lawsuits that assert bad faith on the part of an insurance company must include specific facts that are evidence of that bad faith. Your life or disability insurance claims lawyer must show that rejecting or mishandling your claim was not simply a mistake but was instead either intentional bad faith or neglect amounting to unreasonable behavior.
You can help your own case by making and storing copies of the documents related to your case: medical bills, policies, and correspondence, for example. Take notes when you have discussions with the company representatives; include the date, time, and the name of the party you spoke with.
Insurance bad faith cases are about betrayal. Particularly after paying your insurance premiums, the product and services that you have paid for should be provided.
What Else Should You Know About Insurance Bad Faith?
If you are convinced that your insurance company is negotiating or acting in bad faith, sometimes merely sending a letter to the company – or asking your attorney to send a letter on your behalf – may prompt the company to take the action you need.
In fact, merely retaining an experienced and aggressive life or disability insurance claims lawyer will often persuade an insurance company to treat you properly. If the company knows you may take legal action, and that it could be ordered to pay additional damages along with your contract damages, it may be willing to deal properly with your claim.
The prospect of paying additional damages is one reason insurance companies try to avoid going to court, but a top California life or disability insurance attorney will use every appropriate legal tool to hold your insurance company accountable and recover your payout.
Can You Receive Punitive Damages?
If you prevail in court with your insurance bad faith claim, you will be entitled to damages. Along with the payout on your contract claim, you may also receive punitive damages, which are intended to penalize and deter insurance bad faith. When are punitive damages awarded?
If your lawsuit prevails, you may receive compensatory damages: the payout of your original claim along with your attorney’s fee and other quantifiable financial damages (such as lost income) that were the result of a bad faith delay of your payout or denial of your claim.
California also allows a court or jury to order the payment of punitive damages when a company’s bad faith amounted to intentional fraud, oppression or malice. However, punitive damage awards are rare in California. Your attorney will explain whether or not your own case may qualify for punitive damages.
What Will It Cost You to Seek Your Damages?
Only by retaining a California insurance attorney who routinely handles life, disability or accidental death bad faith insurance cases will you be able to recover your damages from your insurance company based on its bad faith behavior.
Your first consultation with a California insurance attorney is provided with no cost or obligation, and it typically costs you nothing to begin the legal process. Life and disability insurance attorneys in California work on a contingent fee basis, so if for any reason your claim does not prevail and you do not receive a recovery, you will owe your attorney nothing.
If you believe that your insurance company is not treating you properly, take advantage of your first free legal consultation to learn more about your rights as a policyholder and to learn how the law applies to your own bad faith case. McKennon Law Group PC has over 75 years of collective insurance bad faith experience handling life insurance, disability and accidental death insurance claims.