Insurance Bad Faith

Americans spend millions of dollars annually to purchase insurance policies that are supposed to protect them if they are injured, disabled, or in case they accidentally injure someone else. Unfortunately, insurers frequently refuse to pay the legitimate claims of their policyholders.

On this Page:

• What is “Insurance Bad Faith?”

• What You Can Recover (Insurance Bad Faith Damages)

• Examples of Insurance Bad Faith

• ERISA Insurance Policies

• What to do if you think an insurance company is acting in bad faith

• Contact a Lawyer at Kershaw Cutter & Ratinoff

The attorneys of Kershaw, Cutter & Ratinoff have recovered millions of dollars on behalf of clients whose reasonable and valid insurance claims were delayed, denied or underpaid by insurance companies acting in bad faith. It is important to have tough and experienced attorneys on your side when dealing with large and powerful insurance companies. If you think you have been the victim of insurance company bad faith, click here for a free case evaluation.

What is Insurance Bad Faith?

All insurance policies are “contracts” between the insurance company and the person who pays for the policy.  In these contracts the insurance company is required to treat its insured with “good faith and fair dealing” when a claim is made against the policy. This means that the company cannot just look for reasons not to pay. 

It has a duty to conduct a full and prompt investigation of the claim, give fair consideration to reasons why the claim should be paid, notify you of its decision promptly and give you the reasons for denial of the claim in writing. It may not place its own financial interests before the interests of its insured. “Insurance bad faith” occurs when the insurance company ignores its duties and fails to fulfill its end of the insurance contract.

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What You Can Recover — Insurance Bad Faith Damages

A successful bad faith claim against an insurance company could force the company to pay you:

• Everything that it owes under the policy, plus interest (called “contractual damages”);
  
  
• Any out-of-pocket expenses that you had to pay because the claim was denied (called “consequential damages”) such as paying for a rental car or replacing a damaged roof;
  
  
• Payment for any mental or emotional distress that you had because of the denial (called “extra-contractual damages”);
  
  
• Payment to “punish” the insurance company and to discourage it from wrongfully denying valid claims in the future (called “punitive or exemplary damages”) Punitive damages are the most difficult to recover because you must prove that the insurance company acted in a malicious or fraudulent way, or intended to treat you unfairly (with oppression).

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Examples of Insurance Bad Faith

• Unreasonable delay in paying a valid claim
• Refusal to pay disability insurance benefits
• Denial of a valid claim without adequate investigation, or ignoring the findings of an investigation
• Health insurance denial of benefits
• Termination of an insurance policy after a claim has been made
• Unreasonable refusal or failure to defend a policyholder who has been sued for injuring someone else (such as in an auto accident, when the policyholder is the driver who caused the accident)
• Unreasonably offering to settle a claim for much less than its fair value
• Placing the policyholder in danger of personally having to pay a much larger award by unreasonably refusing to pay a claim within policy limits
• Improper or incompetent handling of claims or reserving insufficient funds to pay the claim

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ERISA Insurance Policies

In addition to the examples above, the attorneys of Kershaw, Cutter & Ratinoff have special expertise dealing with group insurance policies that provide employee benefits, such as employee health or disability insurance.  Many such insurance providers claim to be protected from insurance bad faith law suits under the federal legislation known as ERISA (Employee Retirement Income Security Act of 1974).

Unfortunately for consumers who have been abused by these companies, the ERISA regulations do protect them from most of the damages available through bad faith litigation, such as punitive damages.

Never trust insurers’ claims that they are shielded by ERISA.  Many policies are outside of ERISA regulation, and are subject to bad faith law suits. The attorneys of Kershaw, Cutter & Ratinoff insist on reviewing the full insurance policy and other critical documents to determine whether or not ERISA regulations apply. In many cases, this careful review of the policy shows that ERISA does not apply, allowing for a full bad faith law suit to be filed with claims for all types of damages. Even when ERISA does apply, the insurance company may be required to pay your attorneys fees when we succeed in making them pay benefits.

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What to do

What to do if you think an insurance company is acting in bad faith...

Memories fade.  Protect yourself and strengthen your case by doing the following:

• Get it in writing: Insist that every communication from the insurance company be put in writing, either as a letter or email, and save it.
  
  
• Put it in writing: Even when you have short phone conversations with the company, jot down notes about the discussion, including the name of the person you spoke to and the date of the call. Send the company letters or emails confirming the details of the discussion.
  
  
• Start a file: Keep a separate file folder, envelope, or drawer where you can save every letter, note and email.  Print out every email from the company and save those in the paper file, as well as on your computer.
  
  
• Get legal help:  Remember that every state has different legal deadlines (statutes of limitations) for filing law suits.  Don’t wait too long to get legal help. Insurance bad faith claims are extremely complex cases that usually require the help of legal experts.

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Contact Kershaw, Cutter & Ratinoff

Kershaw, Cutter & Ratinoff has years of experience helping victims of insurance bad faith by forcing the insurance companies to pay valid claims, as well as to pay additional related damages, including punitive damages.  We have the expertise and the resources to negotiate settlements, or, when necessary, to take these complex cases through arbitration or trial.

If you think you have been the victim of insurance company bad faith, please click here for a free case evaluation.

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    Nationally recognized civil litigation attorneys

Injured plaintiffs, businesses, and consumers throughout the nation rely on Kershaw, Cutter & Ratinoff for excellent representation in the areas of personal injury, class actions and cases involving defective products and medical devices, insurance bad faith, consumer fraud, nursing home and elder abuse, and medical malpractice, to name a few.

If you are looking for attorneys with a proven record of success, please call us toll-free at 888-285-3333 for a free case evaluation. To find out more about our excellent team of lawyers, visit our attorney profiles.

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