Do you need an attorney regarding an insurance claim or homeowner’s policy?
Dealing with insurance companies after a loss can be frustrating and difficult. If you believe that an insurance company may be negotiating your claim in bad faith, you may be entitled to take legal action against the insurance company. Attorney Ken Wagner has worked with homeowner’s insurance claims in the Albuquerque area and throughout the state of New Mexico for over fifty years.
This article provides some basic information about bad faith insurance tactics in insurance claims. It is not a substitute for speaking to an attorney. Only a qualified bad faith lawyer can give you legal advice.
All insurance companies are required to investigate, negotiate, and settle claims in good faith. This is due to a long standing duty which automatically exists in every insurance contract known as the “implied covenant of good faith and fair dealing.” It requires the party or parties in a contract to treat each other honesty, fairly, and in good faith, so as to not prevent the other party or parties from receiving the benefits of the contract.
When insurance companies violate this duty, they can be held liable in court for their bad faith acts. All jurisdictions, including New Mexico, recognize the right of those harmed by bad faith insurance tactics to bring a claim against the insurance company for its bad faith tactics. These types of claims, which arise under tort law, are often referred to as bad faith insurance claims or bad faith insurance lawsuits.
There are many different insurance company practices that constitute bad faith. Below are examples of bad faith insurance tactics, but this list is by no means exhaustive.
- Denying A Claim Without Giving A Reason
When an insurance company denies a claim following a loss, it should give a reason. If you made a valid claim to an insurance company after a loss and it was denied for no reason or for an invalid reason, you may have a claim against the insurance company for bad faith.
- Failing to Conduct An Adequate Investigation into a Claim
The duty of good faith and fair dealing requires insurance companies to conduct prompt and thorough investigations into all claims. If an insurance company has delayed its investigation into your claim or conducted a poor investigation, you may have a bad faith insurance claim.
- Delaying Payment of a Valid Claim
Insurance companies must pay on claims within a reasonable time frame. If an insurance company has approved your claim, but has unreasonably delayed payment of the claim, you may have a claim against the insurance company for bad faith.
- Offering Significantly Less Money Than A Claim Is Worth
During the claim negotiation process, insurance companies often propose “low-ball” settlements. But when an insurance company refuses to budge from a low-ball settlement offer, it may be acting in bad faith. If an insurance company offered you significantly less money for your claim than it is worth, you may have a claim for bad faith.
- Refusing to Pay A Valid Claim
If an insurance company is refusing to settle or pay a valid claim after a loss, it is likely acting in bad faith. If you filed a claim with an insurance company after a loss that was clearly covered by your policy or that of the other driver and it was denied, the insurance company may be liable for its bad faith denial.
- Making Threatening Statements
Insurance companies should never threaten policyholders or third parties who make claims after a loss. Insurance companies should treat policy holders and others in a respectful and professional manner. If an insurance company has made threats of any kind against you, contact an experienced bad faith lawyer right away.
- Misrepresenting The Law Or Policy Language
If an insurance company has intentionally misrepresented the law or language in the insurance policy applicable to your claim, you may have a legal claim against the insurance company for bad faith. As part of the duty of good faith and fair dealing, insurance companies must be honest and truthful in their statements about the law and the insurance policies involved in a claim.
- Refusing Requests For Documentation
Insurance companies should always comply with reasonable requests for documentation from policy holders and third parties. If you have asked an insurance company to provide documentation in support of its decisions and the insurance company refused to supply it, you may have a claim for bad faith.
In order to establish that an insurance company acted in bad faith, you must show that the facts and circumstances surrounding the insurance company’s actions indicate that the company acted in bad faith. Because the bad faith inquiry is focused on specific facts and circumstances and varies in each case, it can be very difficult to establish that an insurance company acted in bad faith. This is one of the many reasons why you should work with an experienced bad faith lawyer after a loss.
It is important to understand that your claim against an insurance company that you believe acted in bad faith is separate from that against the other party who was responsible for your loss. A bad faith insurance lawyer can help you better understand how a bad faith insurance lawsuit differs from a car accident lawsuit filed against the at-fault driver.
The law on which types of compensation (also known as “damages“) are available in a bad faith lawsuit varies by jurisdiction. Depending on the circumstances, you may be entitled to recover:
- What the insurance company should have paid out for your initial loss claim;
- Damages that occurred as a result of the insurance company’s bad faith denial of your loss claim;
- Damages for the emotional distress caused by the insurance company’s bad faith claim denial; and
- Punitive damages if you can prove that the insurance company acted intentionally or recklessly.
If you need an attorney to help with an insurance claim, let us put our fifty-plus years of experience to work for you. Contact our office for a consultation at (505) 242 - 6300 or e-mail us at email@example.com..
Consultations with our law firm are free and we take cases on a contingency fee basis. This means that we collect an attorney fee only if you recover a settlement or judgment in your lawsuit.