Negotiating with insurance companies in an effort to obtain compensation after a vehicle accident is often challenging. In some incidences, insurance carriers do not properly negotiate a claim for accident and injury compensation in good faith. When a car, motor vehicle or premises accident victim is denied appropriate and reasonable compensation for their injuries caused by another, they are often injured twice – once by the accident or incident and a second time by the claims adjuster working for the insurance company.
Claims adjusters work for insurance carriers processing, negotiating and investigating liability and indemnity claims. The adjusters are required to investigate the case for personal injury or damage against the insurer’s policy. As an insurance company employee, the adjuster believes they have a duty to formulate every plausible reason to reduce the value of the claim or deny it outright. After all, they are well aware who signs their paycheck each week. (Nonetheless, the adjusters real obligations, hypothetically, according to the law are to the policyholder.) The insurance adjuster determines if the insured policyholder caused the accident or incident, and if true, calculates the maximum value of settling the claim out-of-court, while offering the lowest amount possible to the victims.
Common Bad Faith Insurance Tactics
Insurance carriers often practice detrimental tactics that are considered bad faith. The most well known and infamous tactics are delaying payment of legitimate claims, denial of claims covered by the policy and “low ball” settlement tactics. Some other types of bad faith insurance tactics include:
• Denial of a valid claim without providing reasons
• Failure to perform a thorough investigation into a filed claim
• Delay payment for compensation of a valid claim
• Tell the claimant the file has been lost
• Making statements that the claim was filed too late even when the statute of limitations has not yet expired
• Offer substantially less compensation than the value of the claim
• Refuse to pay any compensation of a valid claim
• Make threatening or misleading statements to victims filing a claim for compensation
• Misrepresent policy language or the law concerning insurance coverage
• Ignore phone calls and letters from victims
• Prolong negotiations for a settlement unnecessarily
• Refuse a legitimate or reasonable request for documents
For a very comprehensive examination of bad faith tactics , please visit: http://www.badfaithinsurance.org/reference/General/0122a.htm “Failure of insurer to affirm or deny coverage of claims within a reasonable time upon receipt of claim and/or proofs of loss. 5. Failure to offer or attempt to effectuate prompt, fair and reasonable evaluation of damages and equitable settlements of claims to insured within a reasonable time where liability is reasonably clear.”
Personal Injury attorneys are constantly fighting big insurance’s delay, deny and defend tactics to get justice for injured victims. Sadly, insurance companies are often in litigation mode, requiring negligence lawyers to bring bad faith claims against defiant and deceptive indemnity companies. Bad faith claims against an insurance company could result from any type of claim including premises liability, auto accident, semi-truck crash, wrongful death, bicycle accidents, slip and fall as well as car accidents.
The Rhode Island Supreme Court determined that “…an insurance company has a fiduciary obligation to act in the “best interests of its insured in order to protect the insured from excess liability * * * [and to] refrain from acts that demonstrate greater concern for the insurer’s monetary interest than the financial risk attendant to the insured’s situation.” Medical Malpractice Joint Underwriting Association of Rhode Island v. Rhode Island Insurers’ Insolvency Fund, 703 A.2d 1097, 1102 (R.I.1997).” Michelle ASERMELY as Assignee of Mark Rendine and Julieanne Bernier v. ALLSTATE INSURANCE COMPANY. – See more at: http://caselaw.findlaw.com/ri-supreme-court/1403678.html#sthash.K9J36y8v.dpuf
Car accident lawyers and trucking crash attorneys are well aware that big insurance finds it laughable that they owe any types of duties to anyone besides their stockholders.
If an automobile collision attorney or a wrongful death lawyer cites to the insurance adjuster their “fiduciary duties” to their insured they likely would get a snicker under their breath and a ‘kid that’s not how the game is played’ type comment.
The Rhode Island Supreme Court described an insurance companies obligations to their insured as a “fiduciary” obligation “This fiduciary obligation extends not only to the insurance company’s own insured, but also, as in this case, to a party to whom the insureds have assigned their rights. It is not sufficient that the insurance company act in good faith. An insurance company’s fiduciary obligations include a duty to consider seriously a plaintiff’s reasonable offer to settle within the policy limits.” Assermely http://caselaw.findlaw.com/ri-supreme-court/1403678.html#sthash.K9J36y8v.dpuf
A Liability company claims adjuster is not your friend and they certainly are not your enemy either. The reason they are not your enemy is because they are the one who can open the pocket book and pay the claim. In other words, they are your frenemy. They may serve a useful purpose- getting you paid top dollar compensation for your automobile, truck or motorcycle crash injury cause of action.
The United States Court of appeal Sixth Circuit in CYNTHIA PHELPS, Plaintiff-Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, determined that in examining whether an insurance companies conduct constituted bad faith: “The appropriate inquiry is whether there is sufficient evidence from which reasonable jurors could conclude that in the investigation, evaluation, and processing of the claim, the insurer acted unreasonably and either knew or was conscious of the fact that its conduct was unreasonable.” In Cynthia PHELPS v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, 680 F.3d 725 (2012), citing, Farmland Mut. Ins. Co. v. Johnson, 36 S.W.3d 368, 376 (Ky.2000)
Nonetheless, The Rhode Island Supreme Court made it clear that not every car crash, fatal accident or motorcycle collision denial is a bad faith cause of action. It is well settled that “[t]here cannot be a showing of bad faith when the insurer is able to demonstrate a reasonable basis for denying benefits.” Rumford Property and Liability v. Carbone, 590 A.2d 398, 400 (R.I.1991). If the claim is “ ‘fairly debatable,’ ” there can be no liability in tort. Id. (quoting Bibeault v. Hanover Insurance Co., 417 A.2d 313, 319 (R.I.1980)). – See more at: http://caselaw.findlaw.com/ri-supreme-court/1403678.html#sthash.K9J36y8v.dpuf
The sixth Circuit Court of appeals seems to agree with the RI Supreme Court in the Phelps decision when the Court stated” In addition, an insurer is entitled to challenge a claim through litigation if the claim is “fairly debatable,” Empire Fire & Marine Ins. Co. v. Simpsonville Wrecker Serv., Inc.,880 S.W.2d 886, 889-90 (Ky.Ct. App.1994), on either “the law or the facts.” Wittmer,864 S.W.2d at 890
As a way to avoid being victimized by insurance carriers, individuals suffering damages from insurance companies acting in bad faith should hire a personal injury attorney or Tractor Trailer collision lawyer to handle their claim for compensation.
Defining Bad Faith
Insurance companies have a legal responsibility to their insured to investigate and evaluate every claim presented to them in good faith. The indemnity company has a legal obligation to negotiate and settle all legitimate claims in good faith. By law, the insurance company has an implied covenant of fair dealing where every party must be treated honestly and upfront.
However, when an insurance carrier prevents other parties from receiving any benefit of the contract, they are considered acting in bad faith.
When an insurance company violates the responsibility of treating others fairly and honestly, they can be held legally liable for their bad faith acts in court. Every jurisdiction recognizes the rights of anyone harmed by insurance companies using bad faith tactics. Personal injury attorneys will often file a bad faith claim or lawsuit against all responsible insurance carriers that work to deny or delay a claim without reason.
The Kentucky Supreme Court determined that: “To comply with their obligations under the statute, insurers should not force an insured to go [through] needless adversarial hoops to achieve [her] rights under the policy. [They] cannot lowball claims or delay claims hoping that the insured will settle for less.” Farmland Mut., 36 S.W.3d at 376 (internal quotation marks omitted).
But “mere delay in payment does not amount to outrageous conduct absent some affirmative act of harassment or deception. . . . or evidence supporting a reasonable inference that the purpose of the delay was to extort a more favorable settlement or to deceive the insured with respect to the applicable coverage.” Motorists Mut., 996 S.W.2d at 452-53 (citation omitted). Nor is the insurer’s below-policy-limits offer considered evidence of bad faith per se…” CYNTHIA PHELPS, Plaintiff-Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Claims adjusters working on behalf of the insurance companies will often mold unsavory tactics around the uniqueness of the claim and the victim involved in the accident or incident. Their efforts are not only harmful to the injured party, but considered an act of bad faith under the law.
If your valid claim for compensation is stalled in negotiations with an insurance carrier due to bad faith tactics, it is essential to speak with a personal injury lawyer or car accident attorney now. A negligence attorney working on your behalf can seek comprehensive damages for your medical expenses, lost work, property damage and intangible losses including pain and suffering.
In addition, some civil court system permits victims of bad faith to seek punitive damages and losses against insurance carriers using harmful tactics to injure the victim financially. Lawsuits and claims involving bad faith are often extremely complex and require a comprehensive understanding of state tort law.