A bad faith claim equates the issues related to an auto insurer failing to provide coverage as outlined in the policy. The policyholder has the right to file a lawsuit against their insurance carrier to collect the benefits they were promised. The following are details about these claims and the most common reasons that they are filed.
Why Should Policyholders File a Bad Faith Claim?
Any significant delays in processing a claim after an accident could indicate the insurance company’s refusal to pay the benefits to which the policyholder is entitled. The most common occurrences that lead to sudden and unexplained delays is when a catastrophic accident occurs and requires extensive benefits to cover costs. If the insurer has taken months to manage these requirements, the policyholder should contact an attorney a file a claim.
What are the Most Common Reasons for a Bad Faith Claim?
A breach of contract occurs when the insurance company will not release the benefits available to the policyholder. Any failure to pay a valid claim or to defend the policyholder against a lawsuit is a valid bad faith claim. Any shortage of benefits that don’t equate to the limits defined by the state could also present a breach of contract. If the insurance company tells the policyholder not to seek legal counsel or if they misrepresent any facts about the policy, the policyholder has a valid claim against the insurer.
What are Common Solutions for a Bad Faith Conducted by an Insurer?
The first available solution is for the insurance company to provide the funds as promised in the policy contract. In most cases, they are required to pay interest in addition to these benefits based on the time that has passed since the claim was filed. If the insurer denies that they committed a bad faith and a lawsuit is necessary, the policyholder is also entitled to economic damages and tort-based awards.
A bad faith is an action in which an insurer deliberately denies a policyholder the benefits for which they have submitted premiums. These actions are illegal and present a breach of contract. Policyholders who were denied benefits after an accident injury contact an attorney now.