Personal injury claims are based on accidents or events that can lead to a personal injury. In other words, you make a personal injury claim when someone’s actions (intentional or unintentional) cause you any harm. The most common personal injury cases include:
- Car Accident Cases – careless drivers, driver preoccupied with other things while driving
- Slip & Fall Cases – Physical slips on the property causing in bodily harm
- Medical Malpractice – When a healthcare provider’s treatment falls below the standard, causing physical damage
- Defamation & Slander – injury to person’s reputation
- Assault & Battery – When a person harms another on purpose
Suppose you are a policyholder and have suffered any of these circumstances. In that case, you can make an insurance personal injury claim to recover compensation from the parties responsible. However, it is crucial to remember that each insurance policy covers different grounds. Your insurance policy may not cover the circumstance you suffered.
What Happens After the Accident?
After the personal injury occurs, you usually have three years to start your personal injury claim from the accident date. Once the unfortunate incident has occurred, the next step to contact your insurance provider. In most cases, the insurance company will investigate your claim and damages before providing you with what you’ve claimed.
However, there are some cases where insurance companies deny or undermine the claim proposed by their policyholder. These are known as bad faith personal injury claims.
What Does it Mean When an Insurance Company Acts in a Policyholder’s Bad Faith?
As mandated by the law in California, insurance companies have to implement the covenant of good faith and fair dealing when it comes to their duty to their clients. If an insurance company does not deal fairly with a client or act in good faith, the client has the right to file for a bad faith insurance lawsuit.
In other words, when your insurance company treats you unfairly or differently than the standard of care promised, the insurance companies acting in bad faith. Your insurance company’s failure to act in your good faith can pave the way for bad faith action. Under these circumstances, your insurance company can face bad faith action through your personal injury law firm.
Why are Insurance Companies Given a High Standard?
Undoubtedly, insurance companies have very deep pockets and the power to financially ruin a policyholder if they choose to delay or undervalue a claim. Making disputes against an insurance company is challenging. Clients often seek professional help from experts that can settle their bad faith personal injury claims.
An insurance company that abides by the law is supposed to provide its policyholders with care and support. Any insurance provider under the law of California is supposed to:
- Promptly investigate personal injury claims
- Pay claims to policyholders without delay
- Communicate regularly with the policyholder regarding the status of their personal injury claim
- Provide a reasonable and prompt explanation for any claim denial or compromised settlement
Bad Faith Claims, What Exactly are They?
A bad faith insurance examples look something like this:
- If an insurance company denies your claim after inadequately investigating the damage caused
- The insurance company can also intentionally misinterpret or represent the facts inaccurately to minimize the cost of your injury claim
- The insurance company misinterprets the policy that you own
- The bad faith personal injury claims are settled but take an unreasonable amount of time
- The insurance company denies your claim without stating a rational reason for it
- The insurance company doesn’t meet its duty to a policyholder
- The insurance company isn’t able to defend their policyholder from a liability lawsuit in a personal injury case
Bad Faith Claims Legitimacy: How do You Know?
Not every claim denial on the insurance company’s part can be considered as bad faith. There are situations where a client’s policy may not cover that type of personal injury damage that they suffered.
To erase any doubts, it is crucial to review your insurance policy thoroughly. That being said, insurance policies are complicated documents that have many exclusions that may not be covered.
As a policyholder, if you think you are a victim of bad faith insurance, it is wise to speak with an insurance expert or someone who looks directly into bad faith claims. A personal injury attorney should understand your policy and provide further instructions to suit your needs.
How do bad faith settlements work?
Settlements given in bad faith insurance cases depend on the details of your case and the reputation of your insurance company. If your insurance company has prior bad faith records, it may work to your benefit. A bad faith settlement can potentially be more than what you originally would have been paid if your claim had not been undervalued or denied.
Damages in bad faith lawsuits are extremely complicated due to the punitive damages allowed by California’s law. These punitive damages are supposed to act as a deterrent from repeated behavior. High levels of punitive damages are put in place to ensure that the insurance company does not repeat this behavior. If punitive damages would not exist, insurance companies could easily undervalue or deny claims to their policyholders.
In personal injury cases, the goal is to compensate the injured client financially. The compensation that the injured party receives includes the money they need to pay for property damage, medical bills, lost salaries, and other financial issues brought on by their personal injury accident.
It is crucial to understand that almost everyone depends on an insurance policy to protect themselves from unforeseen events in today’s modern world. If these insurance companies act in bad faith, it shakes the foundation on which the policies are sold.
How to make a statement of bad faith?
As a policyholder, if you believe that your insurance company is negotiating in bad faith, it is time for you to use the term.
Suppose you get no satisfactory response by using the term ‘bad faith’ in your conversations. In that case, you might want to try putting your accusation of bad faith in writing.
While writing a bad faith letter to your insurance company, it is crucial to refer to the conduct you believe amounts to the bad faith. Usually, a written accusation of bad faith towards the insurance company gets prompt attention and is rapidly corrected.
There is no doubt in the fact that if an insurance company has acted in bad faith, it will be liable to pay damages to the policyholder potentially more than the original claim.
However, the rules for what passes as bad faith vary in different states. It is, however, incredibly challenging to win a bad faith case in court. Still, a simple fight over bad faith accusations can procure a reasonable settlement out of an insurance company.
Why do insurance companies settle claims in the first place?
If you’ve ever had an insurance company settle your claim quickly, you must realize that it has nothing to do with them acting in ‘fairness’ or your ‘good faith.’ Just like any other business, the insurance company is trying to save money in the long run by settling your claim as soon as possible. It is cheaper for them to pay you as soon as you make a claim than to prolong the fight.
Let’s say they do choose to prolong a fight after denying or undermining your claim. The insurance company would have to spend a ton of money to gear up to battle in court. The longer it takes, the more money you’re spending on that particular claim. If lawyers get involved, the expenses of the insurance company become deeper.
Once a claim reaches court, costs go through the roof. Hence, insurance companies know that settling claims is way cheaper for them rather than denying them. It is also a significant risk because if an insurance company acts in bad faith, down the line, they might have to settle the bad faith claim in court and end up losing more money than the original claim of the defendant.
When should you call a Personal Injury Lawyer?
Even though personal injury cases are never alike, the action taken to recover compensation is typically the same. Hiding a personal injury attorney is in your best interest, especially if you’ve been part of an accident. The personal injury lawyer will review your case’s details and highlight his own belief about recovering your compensation from the party at fault.
Suppose your insurance company has violated its covenant in fair dealing and denied your claim towards your personal injury accident. In that case, it is your lawyer’s job to investigate if the case has been wrongfully denied. Your attorney can pursue your claim and determine whether the insurance companies claim for bad faith truly exists.
Several car accident victims face significant difficulties in recovering their personal injury protection benefits from their insurance companies due to bad faith claims. This requires legal action through a lawyer who can thoroughly review your insurance benefits and determine the best way to procure full payment from the insurance companies. An insurance company’s tactics usually involve reducing medical bills to decrease payout to the policyholder. An attorney can help each party receive their total amount owed by auditing the insurance company’s payments.
Insurance companies look for loopholes
If your personal injury claim has been denied, it is crucial to understand that insurance companies are profit-based businesses. They manipulate their policies and facts to search for loopholes in your contract. The loopholes allow them to decrease the claim and avoid payment.
A good lawyer can handle claims on behalf of a policyholder who might not be entitled to any compensation for their injuries and losses. There are cases in which injuries and losses sustained by a policyholder are deemed as insubstantial for compensation. In other cases, insurance companies also incorrectly assign faults to policyholders to bump up premiums and avoid payments. It is not uncommon for insurance providers to handle personal injury claims unfairly and deny them without justification.
How can personal injury lawyers help in bad faith insurance cases?
A personal injury attorney’s job is to gather evidence, frame legal theories, and research case law. They can draft motions, pleadings, and requests for their clients other than interviewing witnesses. Personal injury attorneys aren’t just meant to help their clients prepare for trial. They also offer their services pre-trial and post-trial, which includes dealing with the legal system and counseling problems.
Phoong Law Personal Injury Lawyers can help explain prohibited bad faith insurance practices and clarify whether you are a victim of your insurance company. Based on the laws implemented in California, as a policyholder, you have the right to hold your insurance company accountable for prohibited bad faith claim settlement practices.
That being said, if you are sure that your insurance provider has acted in your bad faith by offering you none or a reasonably low settlement that does not match your damage, you can do something about it. Even if your insurance company is threatening cancellation, you are eligible to collect up to double your actual damages by calling out their bad faith. If you’re lucky, the court can reward you with punitive damages that are way more than your original claim.
We can help
Our team of experts can help you with any questions about personal injuries or seeking any assistance related to personal injury law in the Bay Area. Phoong Law, as a law firm, is ready to resolve your personal injury legal problems and provide you with an experienced attorney. If you believe that you being mistreated by your insurance provider, please do not hesitate to contact us today.