Insurance companies who do not negotiate in good faith but rather in bad faith can be punished for their conduct by victims of such conduct. Any insurance policy issued by an insurance company to an insured has the requirement that the insurance company act literally as a fiduciary towards its insured and not in bad faith. Specific type of insurance policies include automobile or vehicular insurance policies, homeowners or any type of building insurance policy, any type of a liability policy, business oriented policy or farm policies. If an insurance company does not meet this standard than it can be sued for damages in excess of what the policy allows. This would include such elements of damages as pain and suffering, job loss or other economic loss or impairment of earning capacity as well as punitive damages.
What type of conduct would constitute “bad faith”? The short answer is any type of decision of an insurance company that does not have a reasonable basis to it. One example that comes to mind is if you have caused injury due to your negligent driving and your automobile insurance carrier defends you against the victim. If the victim’s injuries are obviously greater than the insurance policy limits of liability insurance in order to act in good faith your insurance company must attempt to settle the case with the victim within policy limits.Another type of example that comes to mind is if a home that you insure burns to the ground and the insurance company claims that you committed arson. This occurs more frequently than one might think. In order for the insurance company to deny coverage by contending that the insured burned the house insurance company must have a reasonable basis rather than mere suspicions that the insured did indeed torch his or her own house.
If you suspect that your insurance company has not acted appropriately you should consult an attorney in order to attain an opinion. We at the Beattie Law Firm have represented many victims of bad faith conduct committed by an insurance company. Therefore if you believe that your insurance company as conducted itself and bad faith please contact us for an opinion at no cost to you.