When you purchase an insurance policy and pay your premiums every month, you expect your insurer to be on your side when the need arises. Unfortunately, it doesn’t always happen that way.
Insurance is a way of protecting yourself and your family from financial losses. Statistically speaking, nearly all Americans have at least some kind of insurance. According to the U.S. Census Bureau, more than 92% of people in the country have health insurance and data from the Insurance Information Institute (III) shows that over 87% of American motorists have auto insurance.
Unfortunately, however, insurance companies do not always keep the promises given to their policyholders. When this happens, the insured may be able to pursue bad faith insurance claims to get justice and seek the financial recovery they deserve.
From his office in St. Louis, Tom Wilmowski has served residents of Missouri and Southern Illinois for over 15 years. Tom has extensive experience fighting insurance companies that employ illegal or deceptive tactics to avoid paying out claims or pay considerably less than they should.
If you think your insurance company is acting in bad faith, you might want to schedule a free consultation with Tom Wilmowski and discuss your potential next steps moving forward. Call 314-860-1644 or email us today.
What Is Insurance Bad Faith?
When we purchase an insurance policy, we are essentially buying a promise from the insurer that, should our worst fears come to pass, our insurer will help us bear the burden. Unfortunately, insurers do not always honor these promises. When they don’t, it’s not just frustrating and disappointing, it’s also a case of insurance bad faith.
Insurance bad faith refers to an insurer’s intentional refusal to fulfill its obligations to policyholders. This can take many forms, which we will discuss in detail in the next section. Bad faith can occur at any stage of the insurance process, but it is often at its most damaging when a claim is denied, and the policyholder is left to cope with the consequences of their injury or unexpected incident alone.
How to Determine Bad Faith Insurance
It is not always easy to determine that an insurance company is acting in bad faith without a thorough investigation by an attorney. Tom Wilmowski has experience dealing with many types of bad faith practices, including but not limited to:
- Claiming non-coverage. A common type of bad faith is when an insurance company asserts that a policy does not cover the policyholder’s claim when, in fact, it does. This can manifest as denying a claim outright or insisting that certain conditions or circumstances exempt the claim from coverage without a clear contractual basis.
- Misrepresenting policy terms. An insurer acts in bad faith when they misrepresent the terms of the policy to the insured. This can involve providing misleading information about what’s covered or falsely stating the extent to which certain damages are insured. Policyholders should always cross-reference any questionable statements with their actual policy documents with the help of a lawyer.
- Making offers below a claim’s worth. The insurance adjuster making a settlement offer that is unreasonably low compared to the true value of the claim may also be a sign of bad faith. Companies might do this in hopes that the insured will accept a lower payout to resolve the matter quickly.
- Refusing to provide reasons for denial. Insurance providers must be transparent about their reasons for denying a claim. If an insurer refuses to provide a clear and comprehensive explanation for why a claim was rejected, it could indicate bad faith.
- Delaying the claims process. Intentional and unnecessary delays in processing a claim, such as failing to reply to communications in a timely manner, not conducting investigations promptly, or using stalling tactics, can be a form of bad faith. These delays can place undue pressure on the insured to either drop the claim or accept less favorable terms. According to the Missouri Department of Insurance, insurers have 30 days to investigate a claim, with some exceptions.
- Denying a valid claim. Outright denying a claim that clearly falls within the scope of coverage without a legitimate reason is a clear indicator of bad faith. Policyholders whose valid claim has been denied in bad faith have the right to contest the insurer’s decision.
- Using intimidation tactics. Insurance companies may use intimidation tactics to dissuade claimants from pursuing their rights or – what’s even more common – to persuade them to accept a lower payout. This can involve threatening legal action, overly complex paperwork, or other aggressive strategies.
If you notice any signs of bad faith but are not entirely sure whether or not the insurer’s actions constitute bad faith practices, you might want to schedule a free case review with Tom Wilmowski to discuss your unique situation and know how to proceed.
How to Prove Insurance Bad Faith
In the context of insurance, “bad faith” refers to an insurer’s failure to fulfill its contractual obligations to its policyholders. As a lawyer who has handled countless bad faith insurance claims on behalf of clients, Tom Wilmowski knows that the key to a successful claim lies in demonstrating the following elements:
- Validity of insurance policy. This element requires proof that there was a legitimate insurance policy in effect, which shows the insurer’s obligation to the claimant to act in good faith.
- Failure to act in good faith. The claimant must be able to prove that their insurer did not treat their claim with the fairness and honesty expected, acting contrary to the interests of the insured.
- Unreasonableness of actions. It has to be established that the insurer acted in a way that is considered unreasonable or lacking a legitimate cause.
- Direct causation. The wrongful actions of the insurer must be shown to have directly caused damage to the claimant.
- Nature and extent of damages. The claimant – or their lawyer – must clearly outline the damages incurred as a result of the insurer’s actions.
If you believe that you have been a victim of insurance bad faith, consider contacting Tom Wilmowski to learn about the nuances of insurance law and get knowledgeable help with your case. Tom can help you understand the ways to substantiate your claim and increase the likelihood of its resolution in your favor.
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A former insurance defense lawyer, personal injury attorney Tom Wilmowski prides himself on using his inside knowledge of the insurance industry to obtain maximum value — and often more — for his clients.
Damages Available with a Bad Faith Claim
When your insurer acts in bad faith, you – as the insured party – may be entitled to various kinds of damages. According to the American Bar Association, the term “damages” refers to the amount of money a plaintiff in a civil action is entitled to. The following types of damages are most commonly associated with bad faith insurance claims:
- Actual damages. These direct damages cover the financial losses incurred due to the insurance company’s bad faith actions. Actual damages most often include the amount that was originally denied or delayed.
- Consequential damages. Apart from the actual losses, claimants can also recover consequential damages – those additional losses that occur as a direct consequence of the insurer’s failure. These might include rental car fees or other transportation costs if your insurer fails to pay a valid claim for repairs to your car.
- Punitive damages. In some cases, punitive damages may be awarded if the insurer’s behavior was particularly egregious or malicious. The intent of these damages is not just to compensate the claimant but also to punish the wrongful party and deter similar future conduct.
The availability and potential limits of punitive damages can vary significantly by jurisdiction. In Missouri, punitive damages are typically not awarded to plaintiffs unless they can prove that the defendant acted with a deliberate disregard for their safety or intentionally harmed them without just cause (Revised Statutes of Missouri § 510.261). In the context of a bad faith insurance claim, this may be tricky to prove, especially if you do not have an attorney on your side.
Bad Faith Insurance Claims Frequently Asked Questions (FAQs)
The FAQ section below addresses some of the most common questions that arise when people suspect their insurance carrier of acting in bad faith.
What is a bad faith insurance claim?
You may be able to file a bad faith insurance claim when your insurance company fails to uphold its duty to act fairly and reasonably towards you, the company’s policyholder. This breach can happen in various forms, such as unjustified denial of coverage, failure to investigate a claim promptly, or unreasonably delaying payment.
What are some situations where an insurer can be liable for bad faith?
An insurer might be liable for bad faith in several scenarios, including:
- Failing to promptly and thoroughly investigate a claim
- Unreasonably delaying payments or resolution of a claim
- Denying coverage or claims without a valid reason
- Failing to respond to the claimant’s calls or requests within a reasonable amount of time
- Refusing to settle a case within policy limits when it could and should be settled
- Using deceptive practices to avoid paying claims
In many situations, the insurance company’s bad faith practices may be so subtle that the insured may need a consultation with an attorney to determine whether or not their insurer can be liable for bad faith. This can happen with homeowners insurance, auto insurance, life insurance, health insurance, or liability insurance contracts.
What is a bad faith denial of a claim?
A bad faith denial occurs when an insurer denies a claim without a legitimate reason or fails to thoroughly investigate the claim before denying it. An insurance company has the responsibility to consider all aspects of a claim and to seek to fulfill its contractual obligations honestly.
What damages can be recovered in a bad faith claim?
Damages in a bad faith insurance claim can go beyond the original amount due under the policy. These damages often include actual damages, consequential damages, and punitive damages. Check our section above for a more detailed review of damages in bad faith insurance claims.
Tom Wilmowski: Speak with a Trusted Bad Faith Insurance Claims Attorney
Insurance bad faith can be an overwhelming and disheartening experience. But with the right legal help, you can hold insurers accountable for their actions and obtain the financial recovery you deserve. Tom Wilmowski, a skilled and results-driven bad faith insurance claims attorney based in St. Louis, can assist you in your battle against your insurance company.
Call 314-860-1644 or email us to get started now.
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