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What is a Bad-Faith-Claim?

When you buy an insurance policy, you are typically paying the insurer to provide protection in the event of certain types of disasters. Insurers are required to keep their end of the bargain. However, insurers make more money when they deny claims, and they have significant authority in “investigating” claims and determining whether or not they are valid. Unsurprisingly, insurers sometimes abuse their power and wrongfully deny claims. That is dishonesty, which is essentially what bad faith entails.

In addition, if you were the victim of an insurance company’s bad faith decision, you can file a bad faith claim to recover the money you’re owed.

There Are Two Types of Bad Faith Claims

There are two types of bad faith claims, and both can arise in personal injury cases:

  • First-Party Bad Faith Claim- This happens when you have an insurance policy, and the insurer refuses to pay a claim under it.
  • Third-Party Bad Faith Claim- Includes liability insurance, in which an insurer is supposed to step in and pay claims made against you or your company if they occur.

An example would be if you were at fault in a car accident, your own car insurance company is obligated to pay the other driver’s expenses. If they fail to do so and you end up owing them money, this is considered third-party bad faith.

However, if you were hit by an uninsured driver and relied on your own policy’s uninsured motorist coverage, and your insurer denies your claim on flimsy grounds, you have a first-party case.

What Are My Legal Rights Against Bad Faith Insurers?

Bad faith actions are fairly common as a result of an insurer’s conflicting motives. Unfortunately, far too many people believe there is nothing they can do—or that the fine print in their insurance contract is the final say. However, this is not always the case.

If your insurance company is non – responsive, refuse to process your claim, or you believe they denied your claim for questionable reasons, you’ll need to contact an attorney for legal help. 

Fighting the insurance company on your own can be extremely difficult. You’ll want an attorney on your side if you want to receive fair compensation for your losses. 

Our attorneys can help you. Contact us to schedule a free consultation if you believe your insurance company is handling your case with bad faith.

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