Black’s Law Dictionary (8th ed.) defines bad faith as “an insurance company’s unreasonable and unfounded (though not necessarily fraudulent) refusal to provide coverage in violation of the duties of good faith and fair dealing owed to an insured.”
When you take out an insurance policy – such as on your car – you pay a monthly premium in exchange for the insurance company’s promise that it will cover your losses in the event of an accident. After filing a claim, you expect the insurance company to investigate what happened and then pay a reasonable amount money in a reasonable amount of time. Like many other policyholders, though, you might quickly come to learn that insurance companies have many different methods of avoiding paying otherwise legitimate claims. This is what is meant by insurance company bad faith – the insurance company is acting unreasonable in the payment of a claim to another motorist on your behalf or to you in the event that you are making claims for benefits under your own policy.
This is a tricky situation where you absolutely need the assistance of a personal injury attorney following a car accident to guide you through the process and to deal with the insurance company directly in the case. If you sense things are going in the wrong direction and distrust develops between you and the insurance carrier, contact an injury attorney immediately to step in and confront the insurance company. Sometimes these insurance companies rely upon your lack of understanding about insurance industry standards and claim obligations – don’t be a victim in this process, get a lawyer before things go down that road.
Perhaps a simpler way of understanding what bad faith means in the insurance claim context is to look at several common examples:
Unreasonable Denial
Denying an insurance claim for no reasonable or justifiable explanation is generally regarded as a bad faith insurance practice.
Unreasonable Delay
This bad faith practice happens when an insurance carrier doesn’t confirm the presence of a claim, denies a claim without a credible and reasonable basis, or fails to pay a claim within a reasonable amount of time.
Failure to Communicate
Your insurance company is contractually obligated to promptly send you important information about your claim. If it doesn’t, or if it ignores your inquires, this would be another example of insurance claim bad faith.
Poor Investigation
Denying an insurance claim without having conducted a thorough investigation – or any investigation at all – is a bad faith insurance practice.
Policy Changes
An insurance company acts in bad faith if it attempts to change, alter terms, or cancel a policy after a claim has been submitted.
Suing Your Insurance Company for Denying a Claim
If you’re having trouble getting an insurance claim paid, and you think your insurance carrier is acting in bad faith (see above), then you are permitted under Colorado law to file a bad faith insurance lawsuit.
There two types of bad faith insurance claims:
First-Party
A first-party bad faith insurance claim refers to a claim you file against your own insurance company. As a plaintiff, you would allege that your insurance company engaged in bad faith while handling your claim.
Third-Party
A third-party bad faith claim would describe a situation in which you, the policyholder, has been sued by a third party. Your insurance company would likely step in to defend you on your behalf. In doing so, it could engage in one or more bad faith practices, which includes exposing you to personal legal liability. Suing your own insurance company in this scenario would be characterized as a third-party bad faith insurance claim.
Contact Whalen Injury Lawyers
Are you the victim of insurance company bad faith? If so, then consider filing a bad faith claim with help from the highly experienced bad faith attorneys at Whalen Injury Lawyers. We are an established and award-winning Denver law firm that has recovered millions of dollars on behalf of insurance company bad faith victims and other clients seeking justice in the civil legal system.
Click here to schedule a free consultation using our online contact form or simply call Whalen Injury Lawyers at 720-307-2666.
