When you file an insurance claim, the insurance company has a legal obligation to process your claim in good faith. Among other things, this means conducting an adequate (and timely) investigation, adhering to the terms of your policy, and offering coverage consistent with the insurance company’s legal obligations. If your insurance company fails to process your claim in good faith, you may have a bad faith insurance claim, and you may be entitled to compensation above and beyond the coverage that is available under your policy.
But, when is it worth it to file a bad faith insurance claim? Filing a claim takes time, it costs money, and for most people, it involves stress. On the other hand, if you need to take legal action against your insurance company in order to secure coverage anyway, then adding a claim for bad faith (if you have one) might not add too much to the process. If you believe that your insurance company has denied coverage in bad faith, here are some factors to consider as you weigh your options:
What Are the Risks of Filing a Bad Faith Insurance Lawsuit in Washington?
First, we’ll talk about the “risks” of filing a bad faith insurance lawsuit in Washington. We say “risks” in quotation marks because, as we discuss below, many of these are not truly risks in terms of facing additional losses. Rather, they are factors that should influence your decision about whether it makes sense to move forward with pursuing a claim for insurance bad faith:
- Costs – With any type of lawsuit, there are costs involved. This includes court costs, deposition costs, copying costs, and travel costs, among others. These costs can add up over the course of the litigation. While your law firm will advance these costs for you, if your claim is successful, they will be deducted from your settlement or verdict.
- Attorney’s Fees – Your attorney’s fees will be deducted from your settlement or verdict as well. These fees will be calculated as a percentage of your award, and you will only have to pay if your bad faith insurance claim is successful.
- Time – Filing a lawsuit takes time, and it could be several months to a year (or longer) before you achieve a resolution. Additionally, while your attorney will handle the majority of the work involved in pursuing your claim, you will need to remain actively involved in your case as well.
- Stress – Dealing with the uncertainty of a lawsuit can be stressful, and this stress can become burdensome over time. When pursuing a lawsuit for insurance bad faith, it is important to set realistic expectations and to plan ahead so that you know what to expect during the process.
- Unfavorable Result – With any lawsuit, there is a risk that you will not achieve a favorable result. Litigation is inherently uncertain, and the insurance companies will fight vigorously to avoid liability for allegations of bad faith.
Ultimately, these are risks that your attorney will need to evaluate before deciding whether to accept your case. If your take-home recovery is not likely to be substantial (after factoring in your costs and fees), then it might not be worth it to file a claim. Likewise, if your chances of success are relatively low, then filing a lawsuit might not be worth the costs, time, and stress involved. By carefully evaluating these issues, your attorney can help you make an informed decision about whether to file a claim.
What Are the Rewards of Filing a Bad Faith Insurance Lawsuit in Washington?
Now, let’s talk about the potential rewards. For many insured individuals and businesses, filing an insurance bad faith lawsuit is a viable (and perhaps necessary) option, and it can reap significant benefits. When you file a lawsuit for insurance bad faith, possible favorable outcomes include:
- Coverage for Your Insurance Claim – By holding your insurance company accountable for its bad faith practices, you can secure the coverage to which you are entitled under your policy. If your home has been damaged, if you have medical bills you cannot afford, or if you have been waiting to receive payment for any other insured losses, this can be a huge relief.
- Additional Compensation for Bad Faith – As we mentioned in the introduction, if you have a claim for insurance bad faith, you can obtain compensation above and beyond that to which you are entitled under your policy. This includes compensation for the emotional trauma you have endured as a result of your insurance company’s bad faith practices.
- Payment of Your Costs and Attorneys’ Fees – In some cases, insurance companies can be held liable for claimants’ costs and attorneys’ fees as well. If this is the case, you will receive the full amount of your award without deductions for these expenses.
- Punitive Damages – In egregious cases, policyholders can also recover punitive damages for insurance bad faith. When warranted, punitive damages are awarded in addition to the amount that is necessary to compensate claimants for their losses.
- Favorable Result through Settlement or Trial – Similar to other types of lawsuits, most lawsuits for insurance bad faith are resolved via settlement prior to trial. Additionally, while each case is different and must be considered on its own merits, jurors are often sympathetic to individuals who they feel have been mistreated by large corporations, and it may be possible to obtain a substantial verdict at trial.
If you believe that you may have a claim for insurance bad faith, the attorneys at D’Amore Law Group can help you weigh the potential risks and rewards and decide how best to move forward. For a free, no-obligation consultation, contact us today.
Contact D’Amore Law Group in Vancouver, WA
To speak with an attorney at D’Amore Law Group about filing a claim for insurance bad faith, call us directly or contact us online. Your initial consultation is completely risk-free, and you pay nothing unless we help you recover financial compensation.