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Insurance Bad Faith

Insurance Bad Faith
When you buy an insurance policy, whether it’s for automobile, home, or life, you are expecting to be protected within the limits of the policy. Sometimes, the insurance company wrongfully denies a claim, or won’t pay the full cost of the claim. “Bad Faith” refers to the wrongful denial of coverage or benefits to the policy holder by the insurance company.
An insurance policy is a contract between the insurance company and the policy holder, and this contract must be honored in “good faith.” This obligation of good faith means an insurance company must take all necessary steps to fully investigate a claim and consider all the circumstances supporting it as well as respond to requests for information or communication in a timely matter.

Residents of Washington State enjoy the designation of living in the first state that passed the Insurance Fair Conduct Act (IFCA). This law says that when an insurance carrier is acting in an unfair matter, they can be sued for their actions and the attorney fees needed to fight the insurance bad faith practices. Prior to the IFCA, a customer without legal representation faced a difficult uphill battle.

There are statutes of limitations or certain time frames in which a person must file a lawsuit in a personal injury claim. Insurance companies who stall or delay necessary responses close to or beyond this time limit could be an act of bad faith. An insurance company cannot only search for reasons not to pay the claim, they must fully investigate it to determine if there is coverage under the policy.
Insurance policies are complex and confusing documents with many terms and conditions: it is common that a consumer will not know everything that is or is not covered by their policy, and may be unclear about their rights. Remember, it is in the insurance company’s best interests to limit the amount of compensation they pay out to policyholders.
If you think you have an insurance bad faith claim, contact us to evaluate your policy and determine if the insurance company is acting in bad faith.