Suing Your Insurance Company For Bad Faith

Since bad faith is somewhat difficult to prove in the courtroom, many insurance companies are more apt to fight it than to settle out of court. It’s imperative that you and your attorney agree that you have a solid case before proceeding to trial. If you lose, you may be required to pay the attorney’s fees of your insurance company. Furthermore, they will probably drop your coverage as a result of the lawsuit.. If your insurance company is asking for an unusual amount of documentation from you or your physician, then it could be the basis for a bad faith claim. Insurance companies may request paperwork that was never mentioned in a policy, for example, or they may require you to submit both a preliminary claim report and a formal proof of loss form.. Your insurance company is required to investigate, negotiate, and settle claims in good faith. When this duty is violated, the insurance company can be liable in court for their bad faith actions. Bad faith is broadly defined as dishonest or unfair practices..

One type of bad faith claim against an insurance company is a third-party claim. A third-party bad faith claim arises when an insurer fails to defend or pay a valid claim which has been brought against a covered individual by an injured plaintiff.. Sue your insurance company if it tries to settle your claim for an unreasonably low amount of money. Once you make a claim, you and your insurance company will engage in a negotiation process, where the insurance company tries to talk you down from the amount you request to cover your losses..

If an insurance company is proved to have acted in bad faith, it may be liable to pay damages to the insured well above the actual losses stemming from the claim. The rules about what is and is not bad faith vary from state to state, and it is extremely difficult to win this kind of case in court.. You can sue your insurance company if they violate or fail the terms of the insurance policy. Common violations include not paying claims in a timely fashion, not paying properly filed claims, or making bad faith claims..