Insurance Bad Faith

In America, individuals and businesses have the opportunity to obtain numerous types of insurances which include life, medical, disability, homeowners, and automobile to name a few. The policies often provide first and third party coverage.

In order to understand the concept of insurance bad faith, one must first understand how insurance works. When an insurance policy is sold, you do not acquire a tangible product. When you purchase insurance, you are buying a promise that upon the happening of a certain event the insurance company will be there for you. If the promise is not kept, you may have a claim for insurance bad faith.

First party insurance coverage is a promise from an insurance company to an individual or business to pay you, the insured, for loss suffered if a certain event such as fire, illness, disability, death or theft of property occurs. The purpose of first party insurance is to protect the insured against risk of loss which can include income loss if they become disabled, repair or replacement costs if personal property (such as an automobile) or real property (such as home) are damaged or life insurance benefits if death occurs. The purpose of first party insurance is to make sure that if a tragic event occurs, you are not financially ruined. When you buy first party insurance, you pay premiums and in return you get a promise that if something bad happens such as your house burns down, a family member passes away or that you are no longer able to work due to a disability, the insurance company will be there to fulfill the promise made when the policy was sold.

Third party liability insurance coverage (commonly called liability insurance) is intended to protect the insured from lawsuits or claims. When you purchase third party insurance, the insurance company is promising to be there to defend and protect you if you are sued. You should not need to pay for a lawyer or pay damages if you are found to be at fault for a covered claim. An example of a liability claim is; if as a result of a motor vehicle accident you are sued, then your insurance company has an obligation to make sure that you are protected. This means the insurance company must take all steps necessary to protect you from a lawsuit or judgment. With third party insurance, you should not need to pay for a lawyer or pay any sum of money as a result of the claim.

When a covered loss occurs, the insurance company's obligations under the policy of insurance is triggered. The claims department of an insurance company is required to deliver the promise that was sold. The claims department should provide a prompt, fair and efficient delivery of the promise to provide coverage for a loss. An insurance company may not utilize the claims department as a profit center. Decisions relating to claims should be made without regard to company profitability.

If you or a loved one has suffered an insured loss and presented your claim to your insurance company, the insurer is legally obligated to handle your claim like it was their claim and to act in good faith. Insurance companies are required to pay claims promptly and not deny claims without a reasonable basis or intentionally offering a lower than reasonable settlement.

If you feel that, you are the victim of insurance bad faith or have been denied insurance coverage under any type of insurance policy for benefits including those relating to:

  • disability payments
  • death benefits/life insurance
  • medical payments
  • homeowner claims

or if you have been sued and your insurance company refused to defend the claim or the case proceeded to trial and an award was entered against you for a sum of money in excess of your policy limits, you may have a claim for insurance bad faith.

The dedicated and experienced legal professionals associated with the American Justice Network are committed to fighting for your case and getting you the settlement that you are entitled to. We understand your situation and have a proven track record of legal results. Call us toll free today to speak with a lawyer who has first hand knowledge of the laws associated with this type of litigation, and we will give you a free case evaluation.

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