When you’re hurt in an accident, the obligation falls on the insurance company to investigate a claim, decide liability and settle the issue for a fair amount. Instances in which an insurer is slow to process, investigate or pay a claim may constitute a bad faith action. If so, you may be eligible to file a lawsuit against them.
Each state has its own standards for what is considered a bad faith insurance claim. Some require an insurer’s actions to be without proper cause or unreasonable. An insurer that tries to hold another party liable — despite clear evidence that they aren’t responsible for whatever occurred — may also rise to the level of a bad faith insurance claim.
Before you can sue alleging that bad faith is at play, you must establish that your claim is valid and complies with the conditions listed in your policy. You must also provide documentation that shows that your claim was indeed denied by the insurance company. In some jurisdictions, it may also be necessary for you to submit a final demand to your insurer before a lawsuit is filed.
If you’re looking to file a bad faith claim, then you must also be able to prove that the insurer’s withholding of benefits was unreasonable.
One detail that may help support your case that bad faith is at play is if you can prove that insurance policy provisions or facts were misrepresented. If an insurer fails to acknowledge the claim or to handle it in a timely fashion once it is filed, then they too may be deemed to have acted in bad faith.
Insurers who fail to properly investigate and process claims, deny them after proof of loss has been provided or without providing a reasonable explanation for doing so may also expose themselves to being sued for a bad faith claim.
Like many legal issues, determining whether an insurer acted in bad faith in processing or responding to a claim isn’t always clear-cut. It may take a Rochester no-fault insurance attorney reviewing your crash report and case details to gain some perspective as to why the claim wasn’t resolved so that they can advise you whether any additional action should be taken.