Auto insurance bad faith can mean that a responsible customer is denied coverage and an injured party denied compensation. In these circumstances, despite being entitled to funds from the company, the company refuses to offer money, pay money it is legally obligated or has otherwise agreed to pay. In such a situation, a party might find it necessary to file a bad faith claim against a company. There are several considerations, however, that must be taken into account prior to filing this type of claim.
Agency Involvement
A bad faith claim involves the agencies responsible for monitoring insurance companies. Many times this can be state or federal agencies as well as local regulation bureaus. A bad faith claim is not merely a legal action but an action in which the entire processes and activities of an insurance company are investigated. It is a type of audit which the agencies take very seriously. Because of this, such claims are not taken lightly. They often require months if not years of investigation before findings are made.
Such Claims Are Never Simple
Because of their seriousness, bad faith claims are neither simple nor quickly resolved. Hiring an attorney, therefore, may just be the tip of the iceberg of what you are required or need to do to protect yourself or your claim. Extra documentation, interviews and other investigatory tactics may be used to fully examine your claim. Many times, these claims turn into class action lawsuits, which commonly take several years to resolve.
You May Still Lose
Even after such an investigation, you might not recover anything. If the company has not been found to have acted in bad faith, it will not be required to reimburse you for your costs and injuries for which you originally sought reimbursement. If the company has been found to have acted in bad faith, it may be bankrupt or need to pay significant fines that will first go towards the costs of the investigation. It may mean that the company has no money to pay you for your claim.
It Stops Being About Your Claim
A bad faith claim is not about the claim itself but about the insurance company’s business practices. This means that the investigation is not about whether you are entitled to reimbursement, but what the insurance company did in denying you funds. This means that the specifics of your case are only a small part of a much larger issue, which could possibly lead to you being forgotten and not receiving reimbursement.
Getting Legal Help
A bad faith claim is a serious accusation that is not taken lightly. After such a claim is made, several governmental agencies can become involved in the situation. Because of this, prior to filing such a claim, you should speak with an attorney about what it will mean to your case and possible outcomes.
