If the car insurer does not act in good faith as the claim is handled, it will become liable for extra damages. Following accidents, car insurance claims usually follow highly predictable paths. There are rarely bumps that need to be solved. However, in rare cases, we see insurance companies not living up to the legal obligation stating that negotiation should be done in good faith. This is when we say the insurance company acted in bad faith.
Understanding Bad Faith
Bad faith is a term that most people do not understand. When you hear something you do not know, you want to contact Detroit MI auto accident lawyers to help you because you might end up making some serious mistakes.
When you have an insurance policy, there is a premise that the insurer will do all that is possible to protect your best interests. This means that claims need to be settled and negotiated only in good faith.
The insurance companies that work for the third parties need to act in good faith but the main focus, in this case, is to work for the company, not for the benefit of others. It is thus possible that the insurer does not have the best interests of the other parties involved in mind and can use lies or even fraud when someone rightfully pursues a claim.
When you think that the third-party insurer engaged in outrageous behavior, you need to contact the insurance department of the state. Also, you need to get in touch with a personal injury attorney that is highly experienced because the situation is serious.
What Is Bad Faith?
Bad faith does not appear when the adjuster negotiates because differences of opinions exist. However, such bad faith can be the case when adjusters refuse to tell you why low settlement amounts were offered or something was done that can be considered as being an improper settlement tactic.
Usually, when the claim is simply denied because of an error during the assessment, but there is some sort of reasonable basis for the mistake to have appeared, we do not talk about bad faith.
Usually, the difficult part of the process is that you need to prove that the insurance company did not make a really thorough investigation before the claim was denied. It is also possible that you might have to prove that obvious facts were missed or ignored.
What Damages Can You Receive?
In bad faith cases, there are different compensations that you might be able to recover. The common ones are:
- The money the insurance company had to pay during the initial claim was wrongfully denied.
- Consequential damages that appeared because of the bad faith action. This includes costs associated with injury lawsuits that follow, attorney fees, and more.
It is also possible to receive punitive damages. They appear as an option when you can prove that the company recklessly or intentionally acted with the purpose of harming policyholders. While in most cases we do see punitive damages as being justified, it is still important to have proof of the egregious conduct.