Holding Insurers Accountable For Bad Faith
What is bad faith? Insurance companies owe an insured a duty of good faith and fair dealing. In fact, in Pennsylvania there is statutory law that controls the conduct of insurance companies. Insurance companies know that the insured/claimant is anxious and hurt (financially and physically). Some South Jersey and Pennsylvania insurance companies try to take advantage of the insured by delaying or denying proper payment.
Two Types Of Bad Faith Claimants:
These are claimants who sue their own insurance company to make the insurance company pay a benefit under the policy. A typical example is a homeowner trying to collect from on the homeowner’s policy.
A perfect example is a case our firm successfully handled (Jeffrey M. Bello v. Merrimack Mutual Fire Insurance Company). Our firm represented the plaintiff in a claim against the homeowner’s insurance carrier when a 2008 wind storm caused damage to the client’s retaining wall.
The homeowner’s insurance carrier claimed the wall damage wasn’t covered and that even if it was, the damage wasn’t caused by the wind. Our client claimed that the wind caused the damage and that the damage was continuing – meaning that every day the claim wasn’t paid it would get more expensive to fix.
We alleged that the insurance carrier acted in bad faith when it unreasonably denied coverage and unreasonably tried to blame the cause of the accident on something other than the wind. The jury was instructed on the insurance claim and on the bad faith claim. The jury awarded our client $624,023.20 to fix the wall and properly re-landscape our client’s property.
In addition, Garber Law secured a payment in the amount of $107,000 from the insurance carrier for our client pending trial. At the trial, the jury awarded a verdict in excess of the policy limits. The trial judge awarded attorneys’ fees in the amount of $195,483.34 and court costs in the amount of $31,346.41. Our firm also defeated the insurance company on appeal and obtained an additional fee, bringing the total recovery to just shy of $1.1 million.
In an automobile case, for example, the third party is the person hurt in the car accident. The first and second parties are the at-fault driver and that driver’s insurance company.
- Duty to the personal injury accident victim to negotiate in good faith. A plaintiff can argue that the defendant’s insurance company acted in bad faith. For example, if a claim is worth $100,000 and the insurance policy coverage is $75,000 then the insurance company has a duty to pay the $75,000 if the defendant was responsible. Most state laws hold that the defendant’s insurance company can’t use bad faith to try to reduce the claim below the policy limits – to pay less than the $75,000. If the plaintiff can show the insurance company acted in bad faith, the plaintiff can get the full $100,000 (the real damages, not just the policy limits) and additional penalties including possibly punitive damages and attorneys’ fees.
- Duty to the driver to present a defense. Some insurance companies have an agreement with their client that if the client is sued by a third party the insurance company will defend or pay the claim. If the insurance company refuses to investigate or present a defense, then the insured (the driver in the example) can claim bad faith against the insurance company.
What Acts Are Evidence Of Bad Faith?
- Delay in payment or denial of payment without reasonable grounds
- Failure to properly investigate a claim
- Failure to respond within a reasonable time
- Failure to explain a denial
- Illegal investigation methods
- Harassment and personal attacks
- Requiring claimant to sue other defendants first, when not required
- Withholding relevant information
- Unreasonable litigation
- Unreasonable interpretations
Contact Garber Law For Your FREE Bad Faith Consultation
If you think an insurance company is not negotiating with you fairly, call our law firm. We have the experience, results and testimonials to make the insurance pay its obligations and to hold them accountable for not dealing with you properly.
Contact us online or call us at 856-281-1292. We try cases in New Jersey, including Camden County, Mercer County and Burlington County. We also try cases in Pennsylvania, including Bucks County, Montgomery County, Delaware County and Chester County.