We all have insurance. People get insurance for our homes and cars, as
well as to protect our health and ensure benefits for loved ones in the
unfortunate event of an early death. The insurance is to be certain that
if something terrible happens, you have the funds to repair the gaping
hole in the roof, get our car back on the road, and provide the best possible
medical care for your children. The insurance companies are more than
willing to collect the premiums year-over-year. These companies are obligated
to honor a claim made under a current policy based on the premise of good
faith and fair dealing, but what happens if a legitimate claim is denied
or not properly paid?
There are times when an insurance company acts in "bad faith" in denying a claim under an insurance policy. This does not mean that all denials are made in bad faith. Many insurance companies work hard to honor claims and provide coverage and specific, unique, circumstances prevent them from paying on a claim where the claim simply is not eligible under the terms of the policy. However, when a company does act in bad faith, it may be necessary to pursue litigation in order to get the coverage to which you are entitled as a result of your good faith payments to the insurance company for just this circumstance.
An insurance company may demonstrate bad faith in a number of ways. It may refuse a claim outright or unreasonably delay paying on a claim. In addition, a company may be in breach of its agreement with the policy holder if it refuses to properly defend against a lawsuit covered under the policy or does not issue payment on a valid settlement. The following is a general summary of the justifications for pursuing a bad faith claim against an insurer:
- The insurance carrier refused to investigate the claim in a reasonable manner;
- The insurance carrier delayed the investigation into a claim under a policy to the point where the delay caused harm to the insured;
- The insurance company erroneously determined that a claim was not covered under the policy;
- The insurance company refused to issue payment on a claim without finding that the claim was not covered; and
- The insurance company intentionally misinterpreted the insurance contract in such a way as to deny coverage.
If you have been denied coverage of a claim under an insurance policy, or the insurance company has taken some other bad faith action, you may be able to pursue litigation against the company for breach of contract. In order to bring a case, you will need to demonstrate the following:
- There was insurance coverage for the claim, you are the policy holder, and the policy mandated that the insurer pursue reasonable actions to honor that claim;
- The response of the insurer was not reasonable based on the evidence presented about the legitimacy of the claim;
- The insurer failed to act in accordance with its obligation of good faith and fair dealing and, therefore, is in breach of its contract; and
- The insurance carrier's breach of duty was the actual cause of the damages suffered by the insured.
In order to be prepared to confront the insurance company, you should make sure you keep a paper trail of all documents at issue, as well as maintain a record of communications with the insurer. Keeping track of all the expenses that you have incurred as a result of the delayed or denied claim also will be of paramount importance in achieving a recovery that really makes you whole.
If you are faced with a situation where you have diligently paid all your premiums and now face a denial of coverage, the skilled attorneys at Goeing Goeing and McQuinn PLLC are prepared to zealously advocate on your behalf. Please call us or feel free to contact us through our website to schedule a free consultation. We will sit down with you and discuss all of your legal options.