Someone makes a claim for workers compensation and follows all of the rules and requirements for doing so. That person notifies the insurance company that they have an upcoming surgery and are unable to work pending surgery. The insurance company delays and does not send a denial letter explaining a valid reason for the denial within the required time period. The person has to borrow money to pay for the surgery out of pocket. The insurance company sends multiple letters stating different reasons for denial of the claim; none of them are legally or factually valid reasons. Multiple adjusters delay payment on the claim. The person cannot pay their rent and cannot support their family. Perhaps this person can prove insurance bad faith.
Some other examples of insurance bad faith include:
- Someone makes a valid claim with their insurance company, but the insurer fails to timely investigate and makes multiple invalid excuses for failing to approve the claim.
- Someone makes a valid claim with their insurance company, the company grants the claim, but waits an overlong period of time to grant it, causing the insured to suffer financial or medical hardship.
- An insurer fails to settle a personal injury claim within policy limits before the trial, leaving the insured personally responsible for a verdict in excess of the policy limits after trial.
Insurance bad faith arises out of an insurance contract, where the insurance company is attempting to employ improper tactics to avoid their obligations under the contract. It recognizes that insurance companies are working from a position of power, while the claimant is at the company’s mercy and must rely upon the insurer to act in accordance with the law and its contractual obligations.
Bad faith claims are fact intensive inquiries that require investigation into the conduct of the insurance company employees and, in certain instances, the motives for their actions.
If you believe you have suffered bad faith due to the conduct of your insurance company, contactMurphy & Landon at 866-939-8100 or 302-472-8100.
