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Insurance Lawsuit for "Bad Faith"

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If you have a case that involves LARGE amounts of money, your best bet is to have the BEST representation out there!

All insurance policies contain an implied obligation applicable to the insurance company of  "good faith and fair dealing" towards its insured. When a claim is presented, this implied obligation means that an insurance company can not simply look for reasons not to pay. Instead, the company must make a thorough investigation of the claim, must consider all reasons and circumstances that might support the claim, and must give as much consideration to the financial interest of the insured as it gives to its own financial interest.

If an insurance company refuses to pay a claim that should be paid or offers to settle a claim for less than it knows the claim is worth or denies a claim without adequate investigation, this could give rise to a so-called "bad faith" claim against the insurance company, i.e., a claim that the company has breached its implied obligation of good faith and fair dealing. If the company is found to have acted in bad faith in its handling of a claim, the insured is entitled to all damages resulting from that action, including certain types of damages that would not be available just for breach of contract. In cases of extreme or outrageous misconduct by an insurance company, the insured also may be entitled to receive punitive damages.

  1. An insurer may be acting in bad faith if the insurer delays or denies investigation or payment without a reasonable basis for its delay or denial.
  2. Failure of insurer to acknowledge and reply promptly upon notification of a covered claim.
  3. Failure of insurer to pay a covered claim as a result of failing to do a proper, prompt, and thorough investigation as to reasonable liability and damages based upon all available information.
  4. Failure of insurer to affirm or deny coverage of claims within a reasonable time upon receipt of claim and/or proofs of loss.
  5. Failure to offer or attempt to effectuate a prompt, fair and reasonable evaluation of damages and equitable settlements of claims to insured within reasonable time where liability is reasonably clear.
  6. Insurer attempts to settle a claim for less than the amount to which a reasonable person would have believed was entitled or attempts to substantially diminish a claim requiring an insured to initiate litigation.
  7. Attempting to settle claims on the basis of an application and/or policy which was altered without notice, knowledge or consent of the insured.
  8. Making payment(s) for claims without accompanying statement indicating the coverage for which payment(s) are being made.
  9. Insurer failure to make known an arbitration award appeals policy in an attempt to settle a claim for less than the arbitration awarded.
  10. Insurer requiring claimant or physician to submit both a preliminary claim report and formal proof of loss forms which contain substantially the same information.
  11. Failure of insurer to promptly settle claims, where liability and coverage is reasonably clear under one portion of the insurance policy in order to influence settlements of coverage for another portion(s) of the policy.
  12. Failure of insurer to promptly provide reasonable explanation and basis when denying or making a compromise offer of claim settlement.
  13. Failure of insurer, when making a cash payout to settle a first party auto insured claim, to pay the same amount which the insurer would pay if repairs were made.
  14. Requesting over burdensome documentation demands not required by the policy.
  15. Reference or focusing on recovering on the uninsured portion of the loss.
  16. Using illegal and fraudulent investigative methods and procedures.
  17. Using harassing, intrusive, or demeaning investigative methods and procedures which victimize the insured.
  18. Failure of an insurer to settle a claim directly, when and where settlement is required, and instead requiring the insured to pursue a claim against another party first before offering settlement.
  19. Failure of insurer to make full and satisfactory payment of a first party claim prior to requiring settlement or exhausting the limits of a third-party insurer (i.e. in uninsured motorist cases).
  20. Failure of insurer to unreasonably refuse to waive subrogation thus hindering or preventing a claimant from reaching settlement with the party at fault (i.e. in uninsured motorist cases).
  21. Unjustified contention and/or "lowballing" regarding the value of a loss.
  22. Intentionally withhold, misinterpret or misconstrue claims information and/or failure to not inform insured of provisions and covered benefits under the policy pertinent to a claim.
  23. Attempts to use indiscriminate measures, reference and/or procedures that diminish or reduce the top line amount or value representing full payment of the claim.
  24. Intentional or irresponsible non-disclosure and withholding of information, misinterpretation of file documents and/or policy provisions, that would be in favor of the claimant.
  25. Unsubstantiated and unwarranted accusations of arson.
  26. Wrongful threats not to pay claims.
  27. Utilization and/or development of deceptive insurer schemes or use of outside company services set up or conducted to carry out the same false pretense schemes (i.e. "Independent Medical Examiner Paper Reviews") for the purpose to be able to wrongfully deny or reduce payment of claims.
  28. Insurer advice to claimant not to hire a lawyer.
  29. Treatment of insured's represented by attorneys as insurer adversaries.
  30. Treatment of insured's and claimants as adversaries.
  31. Significant increase in amount of premium as a result of making a claim where insured was not at fault and in conflict with industry standards.
  32. Cancellation of a policy as a result of making a claim or result of an accident where insured was not at fault and in conflict with industry standards.
  33. Failure to live up to, conform, or comply to industry standards.
  34. Using inaccurate or wrongful information of a factual or legal nature to diminish, deny, or delay payment of a claim.
  35. Not being forthcoming with facts regarding coverage to deny, delay, or reduce the amount of the claim.
  36. Using extreme undue persecution, wrongful and victimizing tactics and actions, meant to crush, threaten, thwart, intimidate, oppress, in order to scare away and get the claimant not to make or pursue a claim.
  37. Failure to convey to insured's settlement offers and demands of adversaries in accident and liability cases.
  38. Changing or altering policy coverage without informing or receiving the consent of insured.
  39. Representation by an insurer that an investigation "of fact" is taking place, knowing that no investigation is being done, in order to intentionally stop and dismiss an inquiry by a plaintiff, plaintiff's attorney, or DOI examiner.
  40. Biased investigation of that which is supposed to be neutral and unbiased.
  41. Utilization of internal one-sided or outside companies biased schemes, such as in so-called "IME" bias (independent medical examiner bias), which are supposed to be objective and neutral, in order to wrongfully enable, facilitate, and support insurer's position to fraudulently deny, reduce, or discontinue payments of claims.
  42. Repeated and constant reference and intentional miscommunication and misrepresentation by insurer downplaying the size of a claim to insured's attorney.
  43. The same claims person of an insurer handling conflicting and both sides of the same or related claims.
  44. Deviating from standard procedures called for in an insurer's claims manuals.
  45. Attempting to prevent the court or an insured's attorney with due exception from securing a copy of an insurer's claims manual.
  46. Abusing and/or misusing the judicial court system in order to delay or settle in good faith payment of a claim where liability to the claim is clear and the amount of the claim is reasonable in order to delay insurer's having to make payment of a claim.
  47. Fraudulently misrepresenting and revealing various conflicting financial information that mischaracterizes the true financial information and status of an insurer.
  48. Attempting to shift blame and responsibility of investigation to insured and away from the insurer.
  49. Threatening to harm insured and/or take legal action against an insured to recover amounts paid by insurer as in a short-term workmen's compensation or short-term disability claim in order for insurer to discontinue having to make payment on a longer or long-term basis.
  50. Insurer refusal to settle a third party claim against an insured within the limits of the insured's policy thereby exposing the insured to additional liability.
  51. Intentionally misinterpreting or misconstruing the law to the disadvantage of the insured and benefit of the insurer.
  52. Deny treatment for a covered health benefit because of its expensive cost and instead misrepresenting and suggesting a less costly procedure in its place to be just as effective when it is not.
  53. Unreasonable denial of a covered health benefit because of its high cost.
  54. Unreasonable misinterpretation of policy language.
  55. Taking undue excessive advantage of unlimited time when knowing there may be no time limitations established on alleged investigations of such matters or matters of fact.
  56. Making health insured patients pay their standard copay when the cost of both the drug and the pharmacy's fee for dispensing the managed care prescription is lower than the copay amount.
  57. Causing health insured's to pay a copay that is higher than what the cost of the prescription is to the insurer because of common secretive rebate deals between insurers and drug manufacturers which subsequently are not disclosed and therefore do not accurately represent the true cost of the drug.
  58. Health insurers not acting in the best interested of the patient and/or acting for their own self-enrichment at the health expense and disadvantage of the patient.
  59. Some health insurer secretive deals are alleged to result in the health insurer selection of a more expensive drug to be on their list of acceptable drugs ("Formulary List"), services or procedures deceptively generating greater insurer profits, excessive higher costs to patients and illegally billing federal Medicare or state Medicaid programs.
  60. Good faith insurers look for and find ways to accept and pay claims properly and promptly...bad faith insurers unlawfully look for and find ways to not pay, delay, diminish, disapprove, and deny payment of claims.

As signs of "good faith" insurance are supposed to be the standard and norm, claims are automatically supposed to be paid by law properly and promptly. One such example of a "good faith sign" relating to a double-digit thousand dollar claim was recently communicated to us and was very warmly received by FBIC from such a claimant and policyholder. The claimant indicated that the agent came to the policyholder's home to review and pick up the claim which was to be submitted to the insurer for payment. The agent reviewed the claim with the policy holder and suggested several items that the policyholder for one reason or another had either overlooked or not included in the claim. Upon discussion, the policyholder agreed with the agent that the suggested items should be inclusive as part of the claim and added them to the claim. Those additional items along with the rest of the claim was paid promptly and properly in full and the claimant surprisingly received a check promptly within ten days (....and yes, FYI, the insurer identified was a very highly ranked good faith insurer on FBIC's list of good faith addition in full disclosure we have absolutely no doubt that the fact that the claimant being an attorney with the state government had anything to do with the good faith service provided by this insurer as we have learned from experience that insurers, especially bad faith insurers, know they don't necessarily have to answer to anyone with the exception of giving a second thought and extra consideration should the claimant be the state DOI Commissioner, Chairperson of the State Government's Legislative Committee on Insurance or State Governor).

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Please Note:
Statutes of limitation may apply and determine how long you have to file a lawsuit. In the case of personal injury litigation, the type of injury as well as the state the injury occurred in are some of the factors used to determine the length of time you have in which to file a lawsuit. Read the statute of limitations in your state.

Steven J. Williams, P.C.
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