In order to drive a vehicle legally, everyone is required to have a valid license and carry at least the minimal amount of auto insurance. Most are more than willing to do this, and many get insured beyond what is required in order to feel secure in the knowledge that things will be taken care of if an accident ever does happen. But all too often when an accident does happen, the insurance company quickly denies the claim, drags their feet in processing it, or offers only a token settlement that doesn’t begin to address the true impact of the policyholder’s injuries. Some claims handlers give no reason at all for their complacency. and others point to some small technicality buried in the fine print of their policy contract. Since it is the insurance professional’s job to know and understand the terms of the policy, many customers don’t question the decision. They count on their insurance company to act in good faith and kick themselves for signing something that carried such a loophole.
What many injured accident victims fail to remember in these situations is that the insurance company has as much of an obligation to uphold their end of the bargain in good faith as the policyholder — perhaps even more so.
What is Bad Faith?
While the term “bad faith” is most likely to be heard in conjunction with auto insurance claims, it describes a variety of scenarios where an insurance company does not appear to be taking a claimant seriously. They might refuse to pay due to a petty reason, or no reason at all. They might also fail to do their share of the legwork that determines the cause and fault of the accident as well as analyzing what factors should be considered in calculating appropriate compensation.
Common ways that insurance carriers breach the terms of their contract and act in bad faith include:
- Misrepresenting the facts of a claim or the language in a policy
- Denying a claim that they know is legitimate
- Failing to respond to a claim in a timely manner
- Failing to thoroughly investigate a claim
- Unjustifiably offering less than what is due under the policy
- Refusing or delaying payment without explanation
- Requiring the insured to take unreasonable actions or provide unreasonable documentation
- Unjustly cancelling a policy.
First-Party Bad Faith
Most cases of bad faith by an insurance company are first-party claims. Perhaps the policyholder has purchased coverage beyond the minimum, such as having extra coverage for uninsured drivers, but their insurer is not processing the claim in a timely manner, or is denying the claim without providing a valid reason. When a person has already been injured, they don’t need a whole new fight with the insurance company.
Third-Party Bad Faith
Third-party bad faith happens when it is determined that the person driving the other vehicle was responsible and the insurer is trying to find ways to limit the amount that they offer the accident victim.
What is Bad Faith and What Must the Policy Holder Prove?
“Bad faith” is a technical legal term for when an insurance company denies a claim without a reasonable basis. While the term “bad faith” might imply that the claim was denied in order to advance the insurance company’s interests at the expense of the driver’s interests, that is not always a requirement in successful bad faith cases. Simple and honest mistakes don’t constitute bad faith, but there needs to be a reasonable explanation for the error. Insurers are bound by the terms of the policy. It is up to the policyholder to prove that the denial of the claim was intentional or the decision was made while ignoring facts. What is required of the insurance company varies, depending on the state. In Georgia, if a claimant can prove bad faith with the help of their attorney, the insurance company can be sued directly. Working with a lawyer is essential to help make sure the claimant doesn’t get short changed even more.
If you feel that your insurance claim was unjustly denied or that the insurer was not dealing with you in good faith, the personal injury attorneys at the Mann Law Firm can help by reviewing your circumstances and discussing all available legal options. Call us at 478-742-3381 or fill out our online form. In addition to cases handled in Macon, we are prepared to handle claims on behalf of clients in Dublin, Warner Robins, Milledgeville and other Georgia communities. We would like to meet with you to discuss your case, and we are proud to offer free initial consultations.