When you get injured or your vehicle, home, or property gets damaged due to forces beyond your control, filing an insurance claim is often your best (and perhaps your only) option for securing financial compensation. Whether you have a claim under your own insurance policy (a “first-party” claim) or you need to file a fault-based claim with someone else’s insurer (a “third-party” claim), you expect to be treated fairly and you expect to eventually receive the compensation that you are rightfully owed.
But, what if this does not happen? What if, despite all of the evidence clearly pointing in your favor, the insurance company still refuses to pay? In this scenario, not only may you be entitled to payment under your (or the at-fault party’s) insurance policy, but you may also be entitled to additional compensation for insurance bad faith.
What Is Insurance Bad Faith?
Under the laws of Oregon and Washington, all insurance companies have an obligation to handle first-party and third-party insurance claims in good faith. Broadly speaking, this means that insurance companies must conduct adequate investigations, they must be reasonably diligent in evaluating claims, and they must provide payment when payment is required under the terms of their policies. Essentially, bad faith is the opposite of good faith: If an insurance company intentionally delays or denies payment without justification, then it can be held liable under Oregon and Washington law.
What Are Some Examples of Bad-Faith Insurance Practices?
The Oregon Revised Statutes and the Washington Insurance Fair Conduct Act (IFCA) each separately list examples of conduct that constitute insurance bad faith. For example, Section 746.230 of the Oregon Revised Statutes identifies the following forms of “unfair settlement claim practices”:
- Misrepresenting facts or policy provisions;
- Failing to promptly respond to communications;
- Failing to adopt and implement reasonable standards for investigating claims;
- Refusing to pay claims without conducting a reasonable investigation;
- Failing to affirm or deny coverage of claims within a reasonable time;
- Not attempting to promptly settle claims in good faith when liability is reasonably clear;
- Compelling claimants to initiate litigation to recover amounts due;
- Attempting to settle claims for unreasonable amounts;
- Delaying investigation or payment of claims by requiring submission of duplicate information; and;
- Failing to promptly provide a proper explanation of the reason for denial of a claim.
The Washington IFCA contains similar prohibitions, and it imposes additional requirements on insurance companies as well. For example, Section 284-30-370 of the Washington Administrative Code (which is part of the IFCA) states that, “Every insurer must complete its investigation of a claim within thirty days after notification of claim, unless the investigation cannot reasonably be completed within that time.” Among other bad-faith practices, the IFCA also prohibits insurers from:
- “[Failing] to fully disclose to first party claimants all pertinent benefits, coverages or other provisions of an insurance policy or insurance contract under which a claim is presented”;
- “[Requesting] a first party claimant to sign a release that extends beyond the subject matter that gave rise to the claim payment”; and,
- “[Issuing] checks . . . in partial settlement of a loss or claim under a specific coverage which contain language which release[s] the insurer or its insured from its total liability.”
In short, if your (or someone else’s) insurance company refuses to investigate your claim, refuses to communicate with you, misrepresents the terms of the relevant policy, or offers you substantially less than your claim is worth, there is a chance that you may be a victim of insurance bad faith. If you are, then you may be entitled to recover:
- Up to three times your actual losses, and
- Any court costs, attorneys’ fees, and other expenses you incur in pursuing your bad-faith insurance claim.
What Should I Do If I Suspect Insurance Bad Faith?
What should you do if you suspect that you may be a victim of insurance bad faith? While there are a number of important steps you should take right away, there are also some important mistakes you need to avoid. For example, you should not give up on your claim, and you should not attempt to “retaliate” against the insurance company by responding in-kind or publicizing your frustrations on social media. Some of the key steps you should take in order to improve your chances of securing a financial recovery include:
1. Make Sure You Have Copies of All Forms and Correspondence.
Now is the time to make sure you have copies of everything. From any claim forms you submitted to any emails and text messages you exchanged with your adjuster, all forms of documentation and communication are important. Be sure not to leave anything out: If you have a copy, you can be sure that the insurance company has one, too.
2. Continue Doing Everything You Are Supposed To.
Despite the insurance company’s failures, it is important to continue doing everything you are supposed to. Continue to follow up on your claim, and make sure you are not doing anything that could jeopardize your financial recovery.
3. Keep Paying Your Premiums.
No matter how badly you may want to switch insurance companies, you do not want to stop paying your premiums. The opportunity to ditch your insurance company will come soon enough; but, for now, violating your policy by not making your monthly payments is a bad idea.
4. Continue to Document All Attempts at Resolution.
Now that you have collected copies of everything you have so far, make sure you have a good place to put additional documents and correspondence you receive related to your claim. Continue to keep copies of everything, and take notes whenever something happens or you have specific thoughts or concerns related to your claim.
5. Discuss Your Insurance Claim with an Attorney.
To ensure that you avoid critical mistakes and that you can receive payment as soon as possible, you should discuss your insurance claim with an attorney promptly. At D’Amore Law Group, we can assess your situation to determine if you have a claim for insurance bad faith. If you do, we can use our experience to help you recover just compensation for your losses.
Contact Us to Discuss Your Insurance Claim for Free
To find out if you have a claim for insurance bad faith, please contact us to arrange a free, no-obligation consultation. You can reach us 24/7 and you pay nothing unless we win. So call us or request an appointment online now.