By Thomas W. Henderson, Burg Simpson Shareholder
Case Timeline: Insurance Bad Faith
When you purchase an insurance policy, you are managing your risk by buying protection against the unexpected. The policy is a contract between you/your business and the insurance company. In return for your payment of the premium, the insurance company agrees to protect you against certain risks.
If you make a claim but the insurance company denies or delays payment without a reasonable basis, it is important to understand your rights. Insurance companies owe their insureds the duty of good faith and fair dealing. When an insurance company breaches that duty, it is commonly known as “bad faith”. If you suspect that your insurance company has acted in bad faith, then you should contact a lawyer with experience suing insurance companies for bad faith to discuss your options.
Scheduling a Consultation
Before you meet with an attorney, gather the following information:
- A complete copy of your insurance policy, including all policy forms (not just the declarations and a few endorsements).
- All notes about your conversations with the insurance company.
- The names and contact information for the persons who adjusted your claim.
- Copies of all written correspondence with the insurance company regarding your claim (including letters, emails, texts, etc.).
The consulting attorney will review your policy, all documentation pertaining to your potential case, and the correspondence from the insurance company regarding your claim.
Sending a Demand Letter
If you decide to retain a bad faith insurance attorney, your lawyer will likely begin by drafting a demand letter to the claims adjuster asking him or her to “do the right thing.” The letter, which will include a deadline for their response, will detail the facts of your case, why your attorney believes you are entitled to coverage, and a formal demand for payment. The demand letter may prompt additional examination of your claim and could result in the insurance company paying your claim, but if the insurer refuses to pay, then your attorney will likely consider counseling you to file a bad faith lawsuit.
Before Filing a Bad Faith Lawsuit
Before your attorney files a bad faith lawsuit against an insurance company, he or she will decide whether to file in state or federal court, and select a forum that has jurisdiction over the insurance company. Even if your case is filed in state court, the insurance company may remove the case to federal court. A case set for trial in state court will generally get to trial in about 12 months, while those in federal court will typically get to trial in about 18 months.
Filing a Lawsuit
When drafting a bad faith complaint, your attorney can include claims for breach of contract, bad faith, and for any statutory violations. The complaint will seek payment under the terms of your insurance policy, plus damages for the company’s bad faith, as well as any statutory remedies available in your state. The complaint may also cite additional claims, and your insurer may also be required to pay damages that include:
- Statutory Penalties
- Statutory Interest
- Liability for Judgments in Excess of Policy Limits
- Attorney’s Fees
- Emotional Distress
- Economic Loss
- Punitive Damages
The Discovery Process
During the discovery process, your lawyer will request that your insurance company provide specific pieces of information. He or she may ask for the claim file and request documentation of the insurance company’s procedures for processing claims. This information can be instrumental in establishing bad faith and can help provide evidence that the claims investigation was not properly handled due to administrative inconsistencies or incomplete documentation. Additionally, your attorney may take depositions of the adjusters and other insurance company representatives. Also, the insurance company attorney will likely ask you (your attorney) for documents supporting your claim, ask other questions, as well as take your deposition.
Negotiating a Settlement
Typically, insurance carriers will seek to avoid a trial and attempt to settle the matter outside of the courtroom. But when dealing with insurance companies in bad faith cases, it is always wise to first consult with an attorney and discuss how to obtain the best possible settlement. Your lawyer should be one that already has a lot of experience analyzing the types of conduct your insurance company engaged in so he or she can counsel you on case value. By reviewing the documentation, evidence and additional factors relevant to your case, your attorney will try and persuade the insurance company that it is in its best interest to settle your claim for often substantially more than they would offer you if you were not represented by counsel. Your lawyer will use their experience to try to convince your insurance company to settle your claim and avoid incurring the risk of going to trial and the possibility of having to pay additional damages.
Setting Your Case for Trial
Generally, your lawyer will negotiate with the insurance company throughout the entire bad faith lawsuit process, and he or she will continue to discuss settlement options with you throughout the case. Many of these types of cases are settled before trial, but if your case does proceed to court, your attorney and opposing counsel will present all relevant evidence and question witnesses. After both sides have presented their arguments, the jury will render a decision.
Burg Simpson Handles Bad Faith Insurance Cases
Burg Simpson is a trial firm, and our bad faith insurance lawyers prepare every case for as if it were going to end up in trial. Our firm has the resources and experience to handle complex insurance bad faith claims and hold large insurance companies accountable for their failure to fulfill their responsibilities and obligations.
If you believe your insurance company wrongfully denied or delayed payment of your claim, meeting with an experienced bad faith insurance lawyer at Burg Simpson is your next step. We will review your case and then schedule a consultation to discuss the next steps.
Call Burg Simpson today at 303 792 5595.