Bad Faith Information | Messer & Messer Law Offices

There is an implied duty of good faith and fair dealing in every insurance contract. If you have questions about bad faith insurance practices, contact our firm to schedule a consultation with an experienced attorney for straightforward solutions that will work for you.

People purchase insurance and faithfully pay their premiums each month in order to protect themselves in the event they are injured. But insurance companies are not in any hurry to write you a check to cover your needs. If you have been the victim of insurance bad faith, you may be entitled to significant compensation and even punitive damages.

The attorneys at Messer & Messer Law Offices in Port St. Lucie, Florida, have extensive experience standing up for the victims of bad faith insurance.

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Bad Faith Insurance Resource Links

Coalition Against Insurance Fraud
Information on a variety of insurance fraud topics for both consumers and regulators.

National Association of Public Insurance Adjusters®
NAPIA® provides certification and training services for adjusters.

National Association of Insurance Commissioners
The NAIC® is an organization of insurance regulators from the 50 states, District of Columbia and five U.S. territories. The NAIC's mission is to help state insurance regulators in serving the public interest, promoting competitive markets, facilitating fair treatment of consumers, promoting the reliability and financial solidity of insurance institutions and supporting and improving state regulation of insurance.

ABA® Insurance Claims and Issues
This "blawg" discusses issues related to insurance coverage and to the duties of good faith and fair dealing as presented in claims and as ruled on by courts.

American Insurance Association
Site of the American Insurance Association (AIA), which is the leading property-casualty insurance trade organization, representing 350 insurers.

Bad Faith Insurance - An Overview

There is an implied covenant of good faith and fair dealing in every insurance contract that requires an insurance company to act fairly and in good faith when evaluating a claim. When an insured's (the person covered by the insurance policy) claim is wrongfully denied by an insurer (the entity issuing the insurance), it is considered bad faith. Examples of bad faith include the failure to promptly or thoroughly investigate a claim, inadequate claims processing, unreasonable denial of payment, delay in payment, failure to settle an underlying suit against the insured and failure to defend a suit against the insured. All types of insurance policies, including disability, life, homeowner, automobile and accidental death policies require that the insurer act in good faith. If you believe that your insurance company has acted in bad faith in handling your claim, talk to an experienced attorney at Messer & Messer Law Offices in Port Saint Lucie, Florida, about your situation.

Why Insurers Act in Bad Faith

There is a substantial economic incentive for insurers to act in bad faith. Insurers receive thousands of claims every day. Very few insured parties contest claim decisions, and insurance companies save large amounts of money on claims that would logically be approved. For example, an insurance company wrongfully denies 100 claims. Ninety-five are undisputed, and five are disputed by the insureds. Upon review, the company reverses its denial on four of the claims and pays the amount due. Even if the remaining disputed claim results in a bad faith lawsuit and the insured collects millions of dollars, the company has saved additional millions by denying 95 of 100 claims.

Types of Bad Faith

First-Party Bad Faith: About one-half of the states recognize a cause of action for an insurer's bad faith in first-party insurance claims. Most of these states follow the more narrow approach of the Wisconsin Supreme Court in Anderson v. Continental Insurance Co., 271 N.W.2d 368 (Wis. 1978), which requires the plaintiff to show the insurer acted unreasonably in denying the claim and the insurer's "knowledge or reckless disregard of the lack of a reasonable basis for denying the claim." The remaining states follow the approach set forth by the California Supreme Court in Gruenberg v. Aetna Ins. Co., 510 P.2d 1032 (Cal. 1973), which only requires that the plaintiff show unreasonableness in denying a claim.

Third-Party Bad Faith: Liability insurance policies, such as automobile and homeowner insurance policies, apply to claims against the insured by third parties, including third parties who were injured in accidents caused by insureds. Liability insurance is also known as third-party coverage. A liability policy generally state the insurer's duties under the policy, which typically include paying covered claims, investigating claims and defending the insured in claims that fall within the scope of the policy. A third-party bad faith claim usually relates to an insurer's failure to settle an underlying suit (for example, by an injured party) against the insured; the insurer's wrongful failure to defend a suit against the insured; or the insurer's bad faith or negligence in defending the insured.

Damages

If an insured's bad faith claim is successful, he or she can generally recover the benefits of the policy, as well as consequential losses and damages suffered due to claim denial. A plaintiff can also recover emotional distress damages caused by the insurer's misconduct in first-party or third-party bad faith cases. Depending on the state, a successful plaintiff may be able to recover attorneys' fees and/or prejudgment interest. Again, depending on the state, punitive damages may be available in cases of extreme misconduct by the insurer. In determining punitive damages, the following factors may be relevant: the culpability of the insurer, the insurer's wealth and the ratio of punitive damages to compensatory damages.

Talk to an Insurance Lawyer

If you believe you have been wrongfully denied an insurance payment for a covered loss, you have a right to seek compensation for bad faith. If you wish to review your options, talk to an experienced insurance lawyer as soon as possible. The law imposes a statute of limitations, which varies from state to state, giving you a limited time in which to pursue your claim. Contact an experienced insurance attorney at Messer & Messer Law Offices in Port Saint Lucie to discuss your options.

DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.