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Bad Faith Legislation

Bad faith legislation refers to the laws that define what constitutes a practice of bad faith insurance in a particular state. An insurance company practices bad faith when it illegally denies payment on a legitimate claim, offers a small fraction of what the claim is worth, or flat out denies an individual insurance coverage without a valid reason. Bad faith practices are against the law, and those victimized by them will be entitled to compensation for their injuries and losses.

Our bad faith insurance attorneys welcome victims to attend a complimentary consultation to get a thorough evaluation of their case. For information about your specific circumstances, contact our bad faith lawyers today.

Elements of Bad Faith Laws

Despite the fact that bad faith laws vary from state to state, all of this bad faith legislation defines the same basic elements, including:

The statute of limitations for filing a claim
Whether a claim can be filed as a tort lawsuit and/or a breach of contract case
Whether a third party can file a direct action personal injury lawsuit (Direct action cases allow plaintiffs to directly sue an insurance company, thereby speeding up the legal process.)
Whether plaintiffs can collect punitive damages
Whether there is a cap on the amount of compensation a plaintiff can recover

States that allow direct action lawsuits, permit both tort and contract lawsuits, and don't have a cap on the amount of punitive damages that can be collected are those that have the strictest bad faith laws. Michigan and Hawaii are the only states that have all three of these elements. States, such as California, Delaware, Idaho and Rhode Island, also have fairly strict bad faith laws, as they allow for both tort and contract lawsuits, and they don't cap the amount of punitive damages.

Do You Have a Bad Faith Insurance Claim?

Policyholders will most likely have a viable insurance bad faith claim when an insurer does any of the following in an effort to deny a claim, unreasonably delay payments or offer less than a claim is worth:

Conducting an incomplete, superficial investigation of the claim
Drawing out the processing of a claim
Intentionally misreading or altering the facts of a claim
Retroactively altering a policy without the policyholder's knowledge
Misinterpreting legal terms
Unreasonably interpreting the policy
Unreasonably raising premiums

Such practices are not only illegal, but they can also cause serious physical, emotional and financial damage, as bad faith practices can cause an individual serious debt and/or worsening health problems because he/she is not able to afford or receive the medical help needed.

If you think you may have a bad faith claim, secure the services of a professional lawyer who can help get the compensation you are entitled to. Contact a insurance bad faith attorney today.

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