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Bad Faith in Auto Accident Insurance Claims: Know Your Rights

If you believe television commercials, you might actually think that your auto insurance company is on your side. However, if you have ever been through an auto accident insurance claim, you know that collecting payment from the insurance companies is an adversarial process in which accident victims must carefully protect themselves in order to avoid resolving their claims for a fraction of what they are rightfully owed.

In some cases, the insurance companies will be well within their rights to deny accident victims’ claims for compensation. For example, if there is no evidence of fault (or if there is a legitimate dispute as to fault), then a liability insurer does not have to pay voluntarily. Likewise, if the statute of limitations (limited time to bring a claim) for a victim’s claim has expired, then the at-fault driver’s insurer is not required to pay, regardless of the existence of any evidence of fault.  Nonetheless, your own insurance may pay for medical expenses and wage losses under personal injury protection (PIP) or medical payments coverage.

Legitimate Coverage Disputes vs. Bad Faith Insurance Claim Denials

While there are some legitimate grounds for auto insurance companies to deny payment to accident victims, many denials involve bad-faith insurance practices. Insurance companies can legitimately dispute claims when questions remain unanswered; they cannot refuse to investigate and they cannot deny payment when liability is clear. So, if you are struggling to collect payment for your injuries, is it because there is an issue with your claim? Or, is it because the insurance company is using bad-faith tactics to avoid paying just compensation?

What are the Insurance Companies’ Obligations When You File an Auto Accident Claim?

When you file an auto accident insurance claim in Oregon or Washington, the insurance companies have a legal obligation to process your claim in good faith. Of course, the opposite of good faith is bad faith; when good faith is required, acting in bad faith constitutes a violation of the law.  Having said that, bad faith law differs in each state. Some state laws are very good a protecting and reimbursing consumers that have been the victim of insurance company bad faith practices.  Other states’ laws are not so good at protecting consumers.

As an auto accident victim, the burden is on you to prove that you are entitled to financial compensation. However, Oregon and Washington’s bad-faith insurance laws provide you with some important protections. For example, when defending against your claim, the insurance companies cannot:

  • Deny your claim without conducting an investigation to establish justification for the denial;
  • Deny your claim without providing a reasonable explanation;
  • Fail or refuse to disclose the coverage limits and other relevant details of the policy under which you are seeking compensation;
  • Ignore your communications or refuse to respond to your requests for information;
  • Ignore evidence that is relevant (and favorable) to your claim for coverage;
  • Offer an unreasonably-low settlement or require you to sign a release in order to accept partial payment; or
  • Force you to initiate litigation when liability is reasonably clear and you are attempting to engage in good-faith settlement negotiations.

What Are Your Options If the Insurance Companies Are Handling Your Auto Accident Claim in Bad Faith?

If you believe that the insurance companies are handling your auto accident claim in bad faith, you will need to hire an attorney to handle your claim. Unfortunately, in our experience, bad-faith insurance practices are far more common when accident victims are not represented by legal counsel. Hiring an attorney to handle your claim for you may be all it takes to get the insurance companies to fall in line (and, remember, there are several other reasons to hire a lawyer for an auto accident as well). However, if the insurance companies still continue to deny coverage in bad faith, then your attorney maybe able to take formal legal action in order to make sure you receive the compensation to which you are legally entitled.

What Legal Remedies Are Available to Victims of Bad Faith Auto Insurance Claim Practices?

Oregon and Washington’s auto insurance laws require the insurance companies to pay just compensation in good faith and consistent with the terms of the policies they issue. If your claim has been denied in bad faith, not only are you still entitled to full compensation for your accident-related losses, but you are entitled to additional compensation for the insurance companies’ bad-faith practices. This may include full payment of your court costs and attorneys’ fees plus additional damages of up to three times the value of your original claim. Once again, to collect this additional compensation, you will need to work with an experienced attorney in insurance bad faith practices.

Tips for Protecting Yourself against a Bad-Faith Auto Insurance Claim Denial

While there is virtually nothing you can do to prevent a claims adjuster from making the decision to deny your claim in bad faith, there are steps you can take to protect your legal rights in the case of a bad-faith denial. These steps include:

  • File Your Claim as Soon as Possible. The sooner you file your claim, the more time the insurance companies will have to conduct an investigation. If they fail to investigate despite having the full opportunity to do so, then this can increase your chances of securing additional compensation for a bad-faith denial.
  • Keep Copies of All Correspondence. While your insurance claim is pending, keep copies of all letters, text messages, chat messages, and voicemails you receive from the insurance companies. It is a good idea to print copies so that electronic records don’t get automatically erased or accidentally deleted.
  • Promptly Respond to All Communications. No matter how long it takes your claims adjuster to get back to you, always respond to his or her communications as quickly as possible. But, when you respond, be careful to avoid mistakes that could jeopardize your claim for compensation.

Speak with a  Lawyer at D’Amore Law Group

If you are dealing with bad-faith insurance practices, or if you have just been injured and want to make sure your claim is not unjustly denied, we encourage you to contact us for a free consultation about your legal rights. To discuss your insurance claim with one of our experienced lawyers in confidence, please call 503-222-6333 or request an appointment online today.

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