Bad Faith Insurance Lawyer Facts

bad faith insurance lawyer

A bad faith insurance lawyer should be experienced. Many attorneys are not experienced in handling bad faith car accident cases. You need to ask any car accident attorney that you intend to hire: are you familiar with bad faith law and have you handled bad faith cases in the past?”

What is bad faith when dealing with personal injury and car accident cases?

Many people are not aware of what “bad faith” means when it comes to settling cases with insurance companies. The term bad faith is a legal term unique to the law of the United States (but with parallels elsewhere, particularly Canada) that describes a tort claim that an insured person may have against an insurance company for its bad acts. Under US law, insurance companies owe a duty of good faith and fair dealing to the persons they insure. This duty is often referred to as the implied covenant of good faith and fair dealing which automatically exists by operation of law in every insurance contract. 

If an insurance company violates that covenant, the insured person (or “policyholder”) may sue the company on a tort claim in addition to a standard breach of contract claim. The contract-tort distinction is significant because as a matter of public policy, punitive or exemplary damages are unavailable for contract claims, but are available for tort claims. In addition, consequential damages for breach of contract are traditionally subject to certain constraints not applicable to tort actions (see Hadley vs. Baxendale). The result is that a plaintiff in an insurance bad faith case may be able to recover an amount larger than the original face value of the policy, if the insurance company’s conduct was particularly egregious”.

DUTIES OF INSURANCE COMPANIES

Insurance companies have a duty to deal with a bad faith insurance lawyer with regard to car accident claims, in a good-faith manner. In other words, insurance companies have a general duty to look at and investigate each and every personal injury claim in a good faith and reasonable fashion. An insurance company cannot simply deny your car accident claim and say “oh, there was no damage to your car, so there was no damage to your body”. That would be not dealing with your claim in good faith. For bad faith claims, you need a bad faith insurance lawyer who is well versed in handling these unique type of car accident cases. 

EACH STATE IN THE US HAS THEIR OWN BAD FAITH LAWS

Each and every state has different case law and different statutory law on “bad faith”. For example, many states like Colorado allow you to pursue a bad faith case against your own insurance company if your insurance company handles your claim negligently or denies your claim for no real valid reason. You can file a lawsuit against your own insurance company under these circumstances and receive damages in a court of law that double your recovery. These type of cases are becoming more popular with a bad faith insurance lawyer as insurance companies are simply overloaded and overworked. Insurance companies frequently are denying and mishandling claims in the hopes that you do not have an experienced bad faith insurance lawyer and if you do have a car accident attorney, they may not be all that familiar with this very specialized area of law (bad faith law).

IN COLORADO, BAD FAITH LAW IS CODIFIED AS FOLLOWS:

(1) A first-party claimant as defined in section 10-3-1115 whose claim for payment of benefits has been unreasonably delayed or denied may bring an action in a district court to recover reasonable attorney fees and court costs and two times the covered benefit.

(2) An insurance policy, insurance contract, or plan that is issued in this state that offers health or disability benefits shall not contain a provision purporting to reserve discretion to the insurer, plan administrator, or claim administrator to interpret the terms of the policy, contract, or plan or to determine eligibility for benefits.

(3) An insurance policy, insurance contract, or plan that is issued in this state shall provide that a person who claims health, life, or disability benefits, whose claim has been denied in whole or in part, and who has exhausted his or her administrative remedies shall be entitled to have his or her claim reviewed de novo in any court with jurisdiction and to a trial by jury.

(4) The action authorized in this section is in addition to, and does not limit or affect, other actions available by statute or common law, now or in the future.  Damages awarded pursuant to this section shall not be recoverable in any other action or claim.

(5) If the court finds that an action brought pursuant to this section was frivolous as provided in article 17 of title 13, C.R.S., the court shall award costs and attorney fees to the defendant in the action.

(6) If any provision of this section or its application to any person or circumstance is held illegal, invalid, or unenforceable, no other provisions or applications of this section shall be affected that can be given effect without the illegal, invalid, or unenforceable provision or application, and to this end the provisions of this section are severable.

(7) The general assembly declares that this section is a law regulating insurance.

Again, you need a bad faith insurance lawyer who is familiar with and has applied the above Colorado bad faith statute in his or her personal injury practice.

EXAMPLES OF BAD FAITH AND CAR ACCIDENTS

Let’s say that you have been injured in a car accident and your own insurance company fails to honor your medical payments coverage. Frequently, one has $5,000 in medical payments coverage under one’s auto insurance. It is not mandatory coverage, but everyone should carry med pay coverage for their medical bills. So, when one gets injured in an auto accident and receives medical treatment, your insurance company is obligated to pay up to $5,000 in reasonable and necessary medical expenses. 

Oftentimes, insurance companies will try to deny these bills, saying they are not “reasonable” or are “excessive”. If your chiropractor’s bill, for example, is $100 for one visit, your insurance company may try to save money and not approve this amount and may reduce it to say $70. This can be grounds for a bad faith action against your own insurance company. You pay your auto insurance premiums every month and your very own insurance company fails to pay your medical bills by stating that they are too high or not reasonable. It is merely an attempt by the insurance adjuster to save the insurance company profits. Find an experienced bad faith insurance lawyer.

We all pay for car insurance and we all expect to be protected when we seek medical care. This is frequently not the case as the large insurance companies are only interested in one thing: saving money! They are not interested in your injuries or your medical treatment but how best they can save money and make a profit. This is the typical dilemma between insurance companies and those they insure: you and me. Where your own insurance company is reducing or denying your med pay coverage, you need to find an experienced bad faith insurance lawyer.  

EXPERIENCED BAD FAITH INSURANCE LAWYER

If you have this kind of dispute with your insurance company and they fail to pay your medical bills or fail to uphold their end of the policy contract, then you do need to seek the services of an experienced bad faith insurance lawyer; someone who is familiar with “bad faith” cases. I have personally handled many of these types of cases and would be more than happy to discuss these issues with you. Injured victims should not be “screwed” by their own insurance company. We all have been taught that if we pay our insurance premiums, then our insurance company will look after us and protect us. But, in these days of corporate greed and profit seeking, this is not always the situation. Keep an eye out and make sure that your own insurance company is properly taking care of you.