When you file a personal injury claim with an insurance company, you expect the company to act in good faith. In other words, you assume that the company will fulfill its obligations to you, the policyholder, in an honest, fair, and timely manner. Most insurance companies act in good faith most of the time. But on occasion, a company will refuse to pay a legitimate claim, drag its feet on investigating a claim, or act in bad faith in some other way. When that happens, you, as the injured victim, may have a “bad faith claim.” This is an important legal recourse for victims who feel wronged by an insurance company.
Our Virginia Beach personal injury attorneys understand how bad faith claims work in our state. If you feel that an insurance company breached its duty toward you, we can help you navigate the situation so you can get the compensation you are owed.
What Is Bad Faith?
If an insurance company fails to act honestly and fairly when dealing with its policyholders, it may be said to be acting in bad faith. Possible actions that may lead to a bad faith claim include:
- Denying a claim without a reasonable basis for doing so.
- Unnecessarily delaying payment of a claim or deliberately delaying the processing of the claim.
- Failing to investigate a claim thoroughly—ignoring critical evidence, for example.
- Offering significantly less than the claim is worth, particularly when the evidence supports a higher amount.
- Providing misleading information about the terms of the policy.
- Failing to communicate important information about the status of the claim or not responding to a victim’s questions.
- Treating some policyholders differently based on race, gender, or location.
- Engaging in unethical practices, like coercing a victim into dropping their claim.
- Breaching the terms of the insurance contract in some way.
- Changing their policy limits after the claim is filed to avoid paying what they’re supposed to.
If the insurance company does any of these things, it could face legal consequences.
When Is An Insurance Company Exposed to Bad Faith?
If you were the victim of bad faith actions by an insurance company, you may be able to pursue a bad faith claim against them. In Virginia, if an insurance company is found to have acted in bad faith, they may be held liable for up to double the amount of damages awarded, plus interest and attorney fees.
To be successful with your claim, you and your attorney must be able to show the following:
- Breach of duty: The insurance company failed to uphold its duty to its policyholders.
- Unreasonable actions: The insurance company acted unreasonably toward the policyholder, causing unnecessary delays, denying a valid claim, or failing to conduct an adequate investigation.
- Damages: The insurance company’s actions caused you to suffer damages, including financial losses, emotional distress, or additional legal costs.
If you succeed in your claim, the insurance company may have to pay compensation. This can lead to increased scrutiny from regulatory agencies, which may lead to additional consequences like possible sanctions or increased oversight.
Because of these potential consequences, an insurance company may try to avoid a bad faith claim by acting in other unethical ways.
How Insurance Companies May Try to Avoid Bad Faith Claims
The best way for an insurance company to avoid a bad faith claim is to act ethically and properly toward its policyholders. However, an insurance company may take unethical steps to try to protect its bottom line.
Unethical tactics may include:
- Denying claims based on technicalities: The company may point to technicalities in the policy language to deny valid claims.
- Manipulating internal guidelines: A company may scramble to change or adjust its internal guidelines to justify unethical actions.
- Coercive tactics: The company may try to pressure a policyholder to accept a low-balled settlement offer or use high-pressure tactics.
- Misleading policyholders: The company may try to confuse the policyholder, providing misleading information about coverage or the claims process.
Insurance companies have a lot of ways they can try to manipulate and coerce you as the policyholder or claimant, which is why it’s important to get a personal injury attorney on your side.
How Can a Personal Injury Attorney Help?
If an insurance company has acted in bad faith toward you, contact us today for a free initial consultation. We have over 100 years of combined legal experience and know how to deal with unethical companies that are trying to wriggle out of their responsibilities.
In the case of a client who suffered from a brain injury after a car accident, for example, the insurance company refused to provide the maximum settlement. We got the company into a binding arbitration, which resulted in a $340,000 award for the victim.
We are set up to help you throughout the state of Virginia, with offices in Virginia Beach, Portsmouth, Hampton, and Norfolk.
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