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Bad Faith Lawsuits – Holding Insurance Companies Accountable

If you’re in an accident, regardless of fault, you expect your insurance company to act in good faith. What this means in layman’s terms is you expect your insurance carrier to fully investigate any claims, provide timely answers, and provide honest information. This is part of the contract you enter into with an insurance company – in exchange for monthly or yearly premiums, they agree to provide coverage for any unforeseen accidents.

For a variety of reasons, some insurance companies try and dodge otherwise legitimate claims, and therefore violate the contract they made with the insured.

A quick online search will reveal a litany of bad faith cases across the U.S. Last year for example, we reported on a story where Progressive Insurance was ordered to pay the family of Katie Fisher. The mega-insurer actively defended the at-fault driver in the case so they wouldn’t have to pay the Fisher’s claim.

Following the PR firestorm that erupted over the ordeal, the Fishers’ attorney, Allen Cohen, stated that the insurance company settled with the family for an undisclosed amount “…for their failure to exercise good faith toward their insured.”

Unlike the case of Progressive and Katie Fisher, most cases of this nature go unnoticed by the general public. However, they are fairly common, like this bad faith suit involving a Babcock Law client back in 2010 that resulted in the injured driver’s insurer paying an additional $170,000 on top of the initial claim.

If an insurance company acts in “bad faith,” it creates a chain reaction of events that can be devastating to an accident victim trying to obtain treatment and recover from their injuries. Not only can medical care be impacted, the ordeal can place an inordinate amount of emotional distress on the victim, or claimant.

Just when you need your insurance company the most and you’re at your most vulnerable, you get left out in the cold. This of course can lead to feelings of helplessness and despair as you try and figure out how you will recover, medically and financially, from a devastating accident.

To be clear, you can’t sue your insurance company for bad faith practices just because they deny your claim.

However, if they refuse to investigate your claim, needlessly delay your claim, refuse to negotiate or settle, misrepresent facts to you or the court, or otherwise fail in their obligation to act in good faith, you do have grounds for a suit.

Remember though, you can’t have your car accident or workers’ comp attorney represent you in your bad faith suit. In most cases, your attorney will be your primary witness. Rules of Professional Conduct dictate that an attorney should not “act as an advocate at a trial” where the attorney will be a “necessary witness.”

Therefore, additional counsel is required, but it can come from within the firm representing your accident case…

In addition to contractual obligations, the Colorado Supreme Court has reaffirmed the “good faith” obligation in a 2010 decision involving Mid-Century Insurance Company.

If you or a loved one were in an accident, it’s important you keep this in the back of your mind. Verify the information your insurance company is providing before agreeing to any settlements. Once you settle your case with your insurer, it’s very hard, impossible in fact, to come back and claim “bad faith.”

If you’ve been railroaded by your insurance company, it’s important you discuss your case with a qualified Colorado insurance dispute attorney today – our firm possesses extensive experience in working with insurance companies, and can bring the strongest case possible to ensure you’re adequately compensated for injuries and damages sustained in an accident.

 

Categories: Insurance Disputes
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