Pleasant Law Blog (Insurance Claims, Medical Misakes, and Nursing Home Claims)

On Insurance Claim Fairness

When considering bringing a bad faith lawsuit, remember that what this is all about is fairness. If someone as consulted an insurance lawyer because his or her insurance company has violated unfair claims practices statutes, or acts in bad faith, or otherwise mishandles an insurance claim; that client is put in a bad position. Now, because this person has had to involve an attorney in order to get paid on the claim, that attorney will have to be paid for his or her time. When an insurance company comes out and decides to pay only after the policyholder hires a lawyer, it does not make the policyholder "whole." At that point, the policyholder is entitled to "extra contractual damages," or, damages beyond what was owed contractually under the policy. For one thing, that policyholder now has attorney fees to pay (if not paid out of pocket already). Also, that policyholder may be entitled to additional damages based on the delays and other conduct involved in the mishandling of the claim. It happens very frequently that an insurance company delays or denies a claim, then coincidentally decides to pay it once the policyholder hires a lawyer. What I try to do as an insurance lawyer is help people understand these issues, and analyze the appropriateness of their claim and the likelihood of recovering damges beyond those owed on the insurance policy itself. I think it is good advice to say that policyholders/claimants should make absolutely sure they are doing everything possible to comply with the policy requirements and cooperate with the insurance company. The worst thing that can happen is that you will get paid.