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What is Bad Faith Insurance?

When it comes to settling a claim, insurance companies are in the driver’s seat. Due to this, most courts recognize an obligation of good faith and fair dealing in every insurance policy. However, sometimes insurance companies fail to act judiciously in processing, investigating or paying claims, which is when a policyholder has the right to file a lawsuit.

If you have a bad faith claim against an auto, home, business or other type of insurance company, Avrek Law Firm’s experienced lawyers for car accidents and other personal injuries have a strong track record in advocating for insurance fraud victims to receive the maximum compensation deserved.

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Determining Bad Faith Insurance

Denial of insurance benefits does not necessarily mean that insurance bad faith has occurred. If a loss is not covered by a policy, the insurer is not obligated to pay. Insurers do have limited discretion in settling the claims of the insured.

Bad faith does come into play when there is unreasonable and unfair insurer conduct, which is can include the following insurer actions:

  • Deny a legitimate claim
  • Delay in processing a claim
  • Underpayment
  • Policy cancellation following a claim
  • Failure to defend an insured in a lawsuit

State laws shape the context of bad faith insurance. A claim may either proceed based upon common law established by courts, or the claim may be based on the violation of a state statute. To better understand these legalities, it’s best to work with a qualified auto accident lawyer.

Possible Damages from a Bad Faith Lawsuit

Perceived bad faith insurance may, in fact, only be a breach of contract. This is one of the first things that an Avrek Law Firm car accident lawyer will consider when reviewing your case.

The difference between breach of contract and insurance bad faith is significant in terms of awardable damages. For a breach of contract, usually only the amount of a proper claim under the insurance policy is recoverable. However, successfully proving insurance bad faith can result in a much larger reward, including:

  • The amount that should have been paid under the original claim
  • All damages (i.e. economic loss or psychological harm) caused by the improper claim denial
  • Attorney fees
  • Punitive damages

Get the Help You Need on a Bad Faith Insurance Claim

When insurers act in bad faith, it can make a bad situation worse, but the law protects you from insurance companies that put their own interests before your own.

If your claim was denied, underpaid or delayed, Avrek Law Firm’s auto accident attorneys can help set things right. We’ve recovered millions of dollars on behalf of clients whose insurers acted in bad faith. Call our office or fill out the online form today to schedule your free case consultation!

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