An insurance policy is purchased as a sense of security for you and your loved ones. Therefore, you expect the insurance company to act in good faith to get back to your everyday life when something unexpected incident happens.
But unfortunately, sometimes, insurance companies fail to deliver this essential requirement. Such a condition is called “Bad faith.”
Thus, Bad faith is a situation when an insurance company makes efforts to avoid honoring an insurance policy or tries to bypass fairly paying a claim.
Can you sue an insurance company for bad faith?
Yes, you can sue the insurance company for bad faith by filing a lawsuit in the appropriate court.
The first step to filing this case is to show proof/valid documents that the insurance company has failed to process your claim and honor the terms of your policy.
Complement this claim with the details of how the failure of the claim has dented or hurt you financially.
Here are some examples of cases of an insurance company in bad faith.
- Refusing to pay a valid claim.
- Trying to pay less than the claim amount.
- Delaying in settling the claim amount.
- Denying facts when the evidence supports them.
- Ignoring phone calls, emails, and other attempts to communicate.
- Trying to intimidate or being rude when the claim is asked.
- Misrepresenting what the policy says and what it means.
How can I sue an insurance company for bad faith?
When you wish to file a case against the insurance company for bad faith, here are some pointers that you need to follow:
- Create proper documentation of all the correspondence done with the insurance company.
- Whenever you speak to the insurance company representatives over the phone, make notes with dates or, if possible, record the call.
- Ask the insurance company to give everything in writing.
What types of legal action can be taken against an insurance company?
Each state follows its regulations and statutes that include the kind of lawsuits that can be filed.
However, every state allows a breach of contract, as any insurance policy is a contract.
Most states follow bad-faith tort lawsuits.
For example, in Florida, there is a form provided by the Florida Department of Financial Services (“DFS”) called a Civil Remedy Notice (“CRN”). You can get this form online, fill it up and submit it.
In 2020, In Pin-Pon Corp. v. Landmark American Insurance Company, Judge Middlebrooks of the Southern District of Florida assessed the insurance company’s motion. The court concluded for a CRN to be valid—and declared that the insurance company must pay Fla. Stat. § 624.155.
Though all the processes and forms are available online, hiring an insurance attorney would make navigating the lawsuit easy.
