Bad faith is a concept that all insurance policyholders should be aware of when dealing with auto accident claims in Wilmington, NC. It is unwise to assume that an insurance company will always treat you fairly or protect your best interests. Some insurance companies engage in bad faith practices that can make it difficult to get the settlement you deserve.
What Does Bad Faith Mean?
Bad faith means an insurance company has engaged in unlawful or unreasonable actions and behaviors when processing a claim or communicating with a client. In North Carolina, insurance companies have a legal obligation to handle claims in good faith, meaning in an honest attempt to resolve the claim according to the state’s insurance laws and the terms of the policy.
In a case involving bad faith insurance, the company or one of its representatives handles a claim dishonestly, unfairly or unreasonably. This is a tort or civil wrongdoing that can expose the insurance company to penalties, including being required to pay the client compensation for bad-faith practices that interfered with the client’s fair and reasonable settlement.
Examples of Insurance Bad Faith
Insurance companies operate as for-profit businesses, where their main goal is always to protect their investors’ money. They strive for wide profit margins by minimizing consumer payouts as much as possible. Unfortunately, some insurance companies engage in bad faith practices to accomplish this goal.
Examples of insurance bad faith include:
- Misrepresenting the terms of an insurance policy
- Failing to properly investigate a claim
- Unreasonably delaying investigations or payouts
- Failing to properly communicate with the client
- Requiring excessive evidence from the client
- Rejecting claims without giving a valid reason
- Refusing to offer a reasonable settlement
- Forcing the client to take the case to trial
- Threatening or harassing clients
It can be difficult to detect the signs of bad faith on your own, especially if you’ve never dealt with an insurance company during an injury claim before. If you believe an insurance company is acting unfairly, don’t hesitate to involve a Wilmington personal injury lawyer to protect your rights.
What Are Your Rights in the Face of Insurance Bad Faith?
Victims of bad faith insurance have the right to file legal claims for their related losses under the federal Unfair and Deceptive Trade Practices Act (UDTPA). This act prohibits “unfair, deceptive, or abusive acts or practices” by insurance providers. Consumers are protected by this law when they are adversely affected by insurance bad faith.
A bad-faith legal action brought against an insurance company could result in multiple types of financial compensation:
- Compensation equal to the value of the original claim
- Additional “consequential” damages
- Attorney’s and legal fees
- Punitive damages for especially wrongful acts
To receive compensation for insurance bad faith in North Carolina, you or your attorney must show that the insurance policy existed and was active; the claim was valid; the insurer lacked an acceptable reason to deny, delay or underpay the claim; and that the insurer knowingly disregarded this lack of reason.
How Can Hiring a Bad Faith Lawyer Help?
If you encounter issues that seem like insurance bad faith during an auto accident claim, homeowners insurance claim or another type of insurance matter, don’t hesitate to contact a personal injury attorney in North Carolina for assistance.
An attorney can investigate to determine if there is a legitimate basis for the insurance company’s actions. If not, a personal injury attorney in Wilmington can submit the paperwork and evidence needed to file a bad faith claim and pursue justice.