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What Are My Options If the Insurance Company Won’t Pay?

When you file an insurance claim, you expect the process to be frustrating, but you also expect to eventually receive the payment you are owed. Whether you file a claim with your own insurance company (known as a “first-party” claim) or you file a claim with someone else’s insurer (known as a “third-party” claim), you expect the insurance company to uphold its legal obligations and handle your claim in good faith.

But, what if the insurance company won’t pay? What if, despite doing everything you need to do, the insurance company refuses to accept liability and issue payment? In this scenario, you may be a victim of insurance bad faith, and you may be entitled to additional compensation beyond the value of your initial claim.

Q: When Can Insurance Companies Deny Claims?

Of course, not all insurance claim denials involve bad faith. If your injuries or property damage are not covered, then the insurance company is not obligated to pay. In many cases, there will be a legitimate question as to whether a particular loss is covered, and the insurance company will be well within its rights to conduct an investigation and reach a determination regarding coverage. An insurance claim can also be barred by the applicable statute of limitations, and there are various other factors that go into assessing the viability of an insurance claim as well.

Q: What Are Some Warning Signs for Insurance Bad Faith?

That said, if you have received a formal coverage denial or if your insurance claim is simply going nowhere, it is worth considering the possibility of bad faith. There are a number of warning signs for insurance bad faith, including:

  •       Offering an unreasonably-low settlement;
  •       Refusing to consider relevant evidence;
  •       Failing to disclose (or misrepresenting) policy information;
  •       Failing to respond to communications; and
  •       Failing to provide an explanation for a claim denial.

Ultimately, if you feel strongly that the insurance company has not treated you fairly, you have nothing to lose by discussing your situation with an attorney who has experience handling bad faith insurance claims.

Q: How Can I Prove Insurance Bad Faith?

Proving insurance bad faith is a legal process that requires a clear understanding of the relevant law. For example, Oregon and Washington have differing definitions of what constitutes a bad faith insurance practice, and a successful claim must reference a specific applicable provision of state law. However, as a claimant, there are steps you can take to help your attorney prove your claim for insurance bad faith. One key step is to collect all relevant records that are in your possession. This includes a copy of your policy (if you filed a first-party claim), copies of emails and other correspondence with the insurance company, copies of any photographs or other evidence you submitted, and copies of any documents you have received from the insurance company throughout the course of your claim.

Q: Will I Need to File a Lawsuit in Court?

Maybe. While bad faith insurance claims sometimes end up in litigation, many bad faith insurance claims settle as well. Unfortunately, some insurance companies treat represented and unrepresented claimants very differently, and the insurance company make strike a different tone once you hire an attorney to represent you.

Once you hire an attorney, your attorney will contact the insurance company and demand payment on your behalf. If there is evidence of a bad-faith denial, your attorney may choose to raise this directly with the insurance company. Your attorney will also work with you to ensure that you are claiming the full amount that you are rightfully owed. If the insurance company still does not pay, then your attorney may need to take your case to court in order to recover the financial compensation you deserve.

Q: Am I Entitled to Additional Compensation for Insurance Bad Faith?

Potentially, yes. Not only can a wrongful denial of insurance coverage be frustrating, but it can also be costly. The delays, the time you spend dealing with your claim, and the other consequences of a bad faith insurance denial can all add up to represent significant losses. If your insurance claim has been denied in bad faith, in addition to receiving full compensation for your claim, you may be entitled to compensation for your additional losses as well. In Washington, the law states that victims of insurance bad faith can recover up to three times their actual losses plus their attorneys’ fees, court costs, and other expenses. In Oregon, the law allows for awards of punitive damages in cases of bad faith and possibly the recovery of attorneys’ fees.

Q: How Do I Know When to File a Bad Faith Insurance Claim?

If you have received a letter denying your claim, the time to consider the possibility that it is a bad-faith denial is now. However, if you have been waiting endlessly to receive payment to no avail, you do not have to wait to receive a formal denial before you file a claim for insurance bad faith. Whether the insurance company has simply dropped your claim or it is ignoring you in the hope that you will go away, you are well within your rights to discuss your situation with an experienced attorney.

Q: How Much Will It Cost to Hire an Attorney?

Similar to an auto accident claim, it should not cost you anything out of pocket to hire an attorney to deal with bad faith insurance practices. Your attorney will cover the expenses of filing your claim and provide legal representation on a contingency fee basis. This means that you pay nothing unless your bad faith insurance claim is successful, and your legal fees will be calculated as a percentage of your settlement or court verdict. Additionally, as noted above, it may be possible to recoup your attorneys’ fees and court costs as additional compensation. In that case, you would truly pay nothing for your legal representation.

Speak with a Bad Faith Insurance Lawyer at D’Amore Law Group

Our attorneys represent accident victims and other individuals in bad faith insurance claims throughout Oregon and Washington. If you have questions and would like to speak with an attorney, you can call us today or contact us online for a free initial consultation.

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