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 I feel I was taken advantage of by my insurance company, can I sue them?

If you have an insurance policy - you have a contract with that company. You agree to pay monthly premiums and in return the insurance company agrees to pay you money if and when you have to file a claim.  The law had dictated thru statutes and case law that the insurance must deal with you in a fair manner and not put their interest above your interest. Well, what is their interest? They want to make a profit and the best way to do that is to take in more premiums than they pay out in insurance claims.  However, the insurance company must not put their interest ahead of yours.  You can sue your insurance company when they refuse to pay full value on a valid claim, when they deny your claim, or when they out right deny full coverage.  Give us a call for a NO-BS consultation. 909-798-1500.   

WHAT IS "BAD FAITH"

One thing consumers must realize. You do not want the insurance company to commit a bad faith actions simply to allow you to bring an action. You have been injured in some manner by an unfortunate and unforeseen loss. You want to get compensated and get your life back. The last thing in the world you need is yet another lawsuit for “bad faith".

So when you have an insurance claim, you have to be “pro-active" and keep the adjusters “honest". You have to be capable of creating a paper trail. Why? Because adjusters hate to have a paper trail which demonstrates they have been ignoring you, failing to investigate promptly, or playing the “delay, deny and defend"game. As a result, every interaction with an adjuster has to be memorialized in a letter or email. Record or printoff the letter or email. Keep copies organized.

You also need to be aware that well-trained adjusters will be playing the paper trail game themselves. They will call you repeatedly to get information, updates, status reports, and then follow up with their own letters.This frenetic activity may actually disguise the fact they are doing nothing to move your claim forward to completion and payment. As a result, you need to promptly reply to informational requests and document your response in writing. If your claim is being delayed, but the adjuster is the Energizer Bunny of letter writing, you need to respond by pointing out despite their letters, nothing is being accomplished. If the delays continue, bundle up the correspondence and send it to the Consumer Protection department at the Office of Insurance Commissioner. Do not stop maintaining your paper trail or pro-active stance. The OIC is well-intentioned but under-funded (write your legislator to properly fund the agency) so you cannot expect an immediate response. Insurance companies are expected to act in their policyholders' best interests. But some insurance companies act in bad faith, resulting in unfair claim denials and low settlements. The following events may be signs of a bad faith insurance claim.

Unreasonable Demands

The insurance adjuster may start requesting evidence that is unrelated or unnecessary for your claim in an attempt to devalue your case. He or she may ask for your social media accounts and passwords, demand you see a specific doctor of the company's choice, or require access to your full medical history. These may all be attempts to find any evidence that adjusters can use to damage your claim. They are often looking for a reason to deny your claim, so any damaging information you shared on Facebook about the severity of your injuries, could be used to show that the accident was not as severe as you claim or a pre-existing condition caused your injuries.

Failure to Disclose Policy Details

If you've paid your premiums on time and have a valid policy with the company then you have the right to review your policy terms and coverage limits at any time. If the insurance company is reluctant about answering your questions about your policy or mislead you about a policy term, it may be acting in bad faith.

Refusal to Process Claim

Sometimes an insurance company will outright refuse to process your claim or offer excuses for delaying the claims process. If you are up to date on your payments and your policy is current, there is no reason they should refuse to process your claim.

Unfair Claim Denial

Your insurance policy will describe any types of damages or accidents that your insurance does not cover. This might include intentional damages or acts of God. If your insurance claim is denied and the reason for denial is not listed in the policy exclusions, your insurance company may be acting in bad faith. Your insurer must also offer an explanation for a denial. It cannot simply deny the claim without a valid explanation.

Unfair Settlements

Your insurance policy contains limits for each type of coverage on your policy. This, along with the details of your accident and the extent of your damages, can dictate the reasonable settlement amount you should expect. There are many instances where insurance companies submit very low settlement offers right from the start in the hopes that the policyholder will be desperate enough to take the first offer they receive. You have the right to challenge the insurer's first offer and make sure you are being paid in accordance to your policy limits and actual damages. Before you accept a settlement, check with a personal injury attorney because your insurance company could be acting in bad faith and trying to get you to accept a small settlement that won't cover the full extent of your damages.  How do I look up complaints against my insurance company? 

Insurance companies owe a duty of good faith and fair treatment to all persons insured by their company. What this means is that the insurance company is required by law to act in your best interest as a client. This includes performing proper investigations regarding your claim and doing their general due diligence on your behalf.

For example, if someone files a lawsuit against you and a judgment is rendered in their favor, your insurance company is required to pay the judgment up to the limit of your coverage.

Bad faith can cover a vast array of topics. Examples of bad faith include undue delay in handling claims, inadequate investigation, refusal to defend a lawsuit, threats against an insured, refusing to make a reasonable settlement offer, or making unreasonable interpretations of an insurance policy.

When you purchase an insurance policy, whether for life insurance, disability insurance, homeowners insurance or any other type of policy, you are entitled to the full benefits of the policy if you have a covered claim. If the insurance company refuses to pay or if it delays your payment, you may have a bad faith insurance claim.

Some states, including California, even allow clients that were subject to bad faith by an insurance company to sue the company for punitive damages that can exceed their policy limits. This serves mainly to deter insurance companies from engaging in future bad faith behaviors.

A famous example is State Farm Mutual Auto Insurance Co. v. Campbell,  in which the U.S. Supreme Court overturned a jury verdict of $145 million in punitive damages against State Farm Insurance. Although the verdict was overturned, this represents the immense amount of financial recourse that can be awarded in a bad faith lawsuit.

Insurance companies are required to act in the best interests of their policy holders. Insurance companies also understand the serious implications that a bad faith claim can cause. Therefore, they must be very careful as to handling every claim professionally and thoroughly.

Inherently, insurance companies have a self-interest to attempt to pay as little as possible, or attempt to relinquish liability in its entirety regarding claims against its policy holders.

If an insurance company refuses to pay your claim, denies payment or offers an insufficient amount, it would be wise to hire a lawyer to enforce the insurance company’s obligations. (credit for the above information comes from the avvo com website and their contributing authors)