You live in Massachusetts, you own or lease a car, you always make your monthly insurance payments, then “boom” one day your involved in an accident. You notify your insurance company of what happened and most of the time the insurance carrier will make all the appropriate payments, you receive the proper compensation and the case is closed. However, there are some instances where the insurance company may not be so amenable to making the payments- and that’s when customers can run into trouble.
The definition of an insurance company is “a business that provides coverage, in the form of compensation resulting from loss, damages, injury, treatment or hardship in exchange for premium payments.” You pay insurance companies in exchange for the promise that they will provide some level of protection if the need arises. An insurance company has a duty to not only provide that protection, but also to negotiate and settle claims with your best interests in mind. This is called ‘good faith.’ If you believe that your insurance company isn’t following good faith practices, what do you do?
What Constitutes a Bad Faith Claim?
When you purchase insurance, whether it’s home, auto, health, life, or any other type of insurance, the carrier is legally bound to the terms within the policy. If the insurance company fails to honor the agreement, it is acting in bad faith. This is true for both your own insurance company and a third party carrier, if one is involved.
Third Party Insurance and Bad Faith Practices
Although a third party carrier has a duty of care to handle your claims in good faith, they can get away with a bit more. For a third-party bad faith claim to have merit, the adjuster must have engaged in some relatively outrageous behavior, such as outright lying or fraud. Examples of actions which could result in a bad faith claim against a third party insurance company include:
- Withholding or tampering with evidence
- Tampering with a witness
- Purposely “losing” important documentation or evidence
Your Own Insurance Company is Held to a Much Higher Duty of Care
Although outright lies and fraud will also land your own carrier in hot water, much less is required to legitimize a claim of bad faith. For example, if your adjuster is refusing to provide specific reasons for an offer of an extremely low settlement, this could be considered an act of bad faith. But where do you go from here?
Filing a Bad Faith Claim
Hiring a skilled Boston accident attorney with extensive experience in the area of insurance is crucial to a positive outcome. The beginning steps include putting your accusations in writing by sending a bad faith letter to the insurance company. These accusations are typically taken very seriously. However, if done incorrectly, approaching the carrier with a bad faith claim can cost you in the long run. If it can be proven that the insurance carrier acted in bad faith, the company may be required to pay damages in excess of the injury compensation. More commonly, however, a claim of bad faith encourages the carrier to offer a significantly more attractive settlement. Continue reading