Bad
Faith Insurance Litigation
Through bad faith insurance litigation, consumers who have been wrongly denied benefits from a legitimate insurance claim may seek compensation from the wrongful insurance company. Bad faith insurance litigation is an option for any insurance policyholder who has been unfairly denied benefits that are covered under their insurance policy. In recent years, bad faith insurance litigation has increased on par with the proliferation of bad faith insurance dealings committed by seemingly reputable insurance companies.
Many types of insurers are notorious for banefully denying policyholders benefits sought through legitimate claims. Legally, insurance companies have a fiduciary duty to conduct all dealings with policy holders in accordance with good faith and fair dealing principles. This means that insurers have a duty to look for ways to pay benefits to policyholders, rather than to look or ways to deny them. In practice, many insurance companies teeter the fine line of violating the principles of good faith in the bulk of their insurance claims transactions.
There are many ways that an insurer will act in bad faith in order to deny legitimate policyholder claims. Insurers may demand exhaustive and unreasonable documentation from a policyholder, may claim to have lost or never received pertinent information, declare that information was not received in a timely manner, may assert that a valid claim is not covered, or provide any number of other excuses to wrongfully deny legitimate claims.
Insurance companies who fail to act in good faith are in breech of contract, an offense that gives actionable cause for bad faith insurance litigation. When an insurance company has acted in bad faith, the insured has the legal right to seek compensation for their damages through bad faith insurance litigation. Bad faith insurance litigation is pursued in the civil legal system. In a civil lawsuit, the plaintiff (in this case, the wronged policyholder) has the burden of proving that the insurer acted in bad faith. When the legal decision rendered through bad faith insurance litigation favors the plaintiff, compensatory and/or punitive damages may be awarded.
Punitive damages, ordered though bad faith insurance litigation, are intended to punish the defendant for their intentional or malicious wrongdoing. Punitive damages are also supposed to deter the defendant and others from committing similar offenses in the future. Again in practice, this is not always the case. Insurance companies are often multi-billion dollar corporations. When these massive conglomerates are fined a trivial amount, punitive damages do nothing to deter them from continuing to commit fraudulent acts. This has been the case in some bad faith insurance litigation in the past.
Bad faith insurance litigation involves challenging major companies who have committed unfair and unlawful actions. To pursue bad faith insurance litigation which will elicit the most favorable outcome, aggrieved consumers require the professional services of a qualified and experienced attorney who can protect and maximize their legal interests.If
you would like more information on the elements of bad faith, please contact us to confer with a bad faith lawyer.
