Insurance Bad FaithWe have successfully represented plaintiffs in civil matters for more than three decades.
When an insurance company fails to honor the obligations in your insurance contract, or fails to perform some other responsibility it has to you, pursuant to the insurance you purchased, you may have a case against the insurance company for “bad faith.”
Bad faith arises from disputes between you and your own insurance company. It is not considered bad faith if another carrier refuses to cover your loss since there is no contract between you and that insurance company.
You may find bad faith among any form of insurance, such as health, dental, automobile, renters and/or homeowners. Examples of bad faith can include failure to provide for a defense as required in the event you are sued or failure to follow contractual procedures in the event of a dispute as to the amount of compensation to be provided to you under your own coverage after an accident.
Insurance companies have years of legal experience litigating the terms of their contracts. Written by skilled lawyers who carefully upgrade the terms as new decisions are handed down by appellate courts, coverage attorneys incorporate new case law into policies and regularly re-write contracts. Terms that may appear to a consumer to be simple English may have their origin in legal opinions that may have been given a special interpretation that consumers are not familiar with. Advocates for insurance companies have an intimate knowledge of how standard terms have been defined by the courts, and therefore, have the upper hand in drafting policies and selecting the language most advantageous to insurance companies.
Do I have a case?
Language of the Policy
Insurance law routinely provides that the language of the policy is clear and explicit and the clear meaning will be enforced. There should not be any ambiguity or uncertainty in a policy. An uncertainty in choice of wording or ambiguity in meaning would be resolved in favor of the policyholder and against the insurer.
Courts interpret insurance contracts to effectuate only the objectively reasonable expectations of the insured. Any personal or subjective expectation of a policyholder, which cannot be reasonably supported by the language of the contract, is unenforceable. It does not matter what the policyholder/customer truly and honestly believes.
That subjective opinion is never an issue in a court of law. The real contest is to decide what the words of the policy mean to an objective person or a disinterested, common reader. So, when reading an insurance policy, the words selected by the insurance company are to be interpreted by judges according to their plain meaning. A plain meaning is one an ordinary person would attach to such words, not the meaning which might be utilized by an insurance company executive or an attorney.
Exclusions and Limitations
Exclusions and limitations are in a policy because they often result in denying coverage when there is a loss. All exclusions and limitations must be written in clear and unmistakable language. It is for this reason that exclusions and limitations are always narrowly, or strictly, construed. If there is more than one meaning given to a limitation or exclusion, the narrowest interpretation will be adopted by the court. Any exclusionary clause that is not clear and conspicuous will be interpreted in the interests of the insured.
Promise of Good Faith
Every insurance contract contains an unwritten, invisible or implied term referred to as the “covenant” or “promise of good faith and fair dealing”. This is a promise that the law imposes upon an insurance company to always act fairly towards its policyholders in handling their claims. Whether or not such a clause is included in the policy, judges will read the policy as if it were there. Carriers must meet the reasonable expectations of the policyholder and an insurer must always give as much consideration to the financial interests of those it insures as it does to its own financial interests.
In bad faith cases a jury is always asked whether under the facts the carrier acted reasonably. Denying benefits, delaying payments and paying less than what is owed are examples of bad faith. Insurance companies are obligated to promptly and thoroughly investigate all claims and must inquire into all the possible issues that might support an insured’s claim. This obligation is not terminated simply because the insured files a lawsuit against the company. An insurer may make a belated offer of settlement after their actions of bad faith, but this does not correct or set aside the previous wrongful conduct. Any payments to the insured only reduce the amount of the insurance company’s final liability as determined by a jury.
What can I do?
In a bad faith action an insurance company’s business practices routinely admissible to show motive, opportunity, intent, plan, knowledge, the absence of a mistake or an accident in the manner in which it dealt with its insured.
It is not necessary to show that the insurer intended to cause harm in a breach of the covenant of good faith and fair dealing. The policyholder need only show that the insurer failed to honor the agreement and they had no cause not to pay what was due under the contract.
When a person buys an insurance policy, the policy makes it clear that if a claim is not satisfied the policyholder will suffer financial pressure and emotional distress. Policyholders obviously will be vulnerable to oppressive tactics by a carrier and insurance companies are presumed to know that a denial of benefits will very well result in emotional distress to their policyholders.
When a policyholder successfully shows that an insurer breached the covenant of good faith and fair dealing, the policyholder can recover all damages caused by the breach. This includes:
- All Consequential Losses
- Loss of use of the Insurance Proceeds
- General Damages
- Attorney’s Fees
- Punitive Damages
In all Bad Faith Insurance cases it is essential that measures be taken promptly to review all communication with the insurance company and investigate the insurance coverage in question before the statute of limitations expires.
If you or a loved one have suffered due to an insurance company’s bad faith
Please contact Geiser, Bowman & McLafferty at 614-222-4444 / 877-706-6446. Our initial consultation is free of charge, and if we agree to accept your case, we will work on a contingent fee basis, which means we get paid for our services only if there is a monetary award or recovery of funds on your behalf. You may have a valid claim and be entitled to compensation.