What Happens If the Insurance Company Acts in Bad Faith?

When you file a personal injury claim, you immediately expect your insurance company to treat you with fairness as well as prioritize your needs. However, when an insurance company is not holding up their part of the deal, this usually means they are acting in bad faith.

What’s considered bad faith?

The goal of most insurance companies is to protect their clients’ cars, businesses, houses, and more. They also help with medical coverage and healthcare costs when accidents occur. Therefore, when you file a claim, you expect the insurance company to fulfill these promises instead of focusing on their own profits.

When an insurance company does not do what it is supposed to do, such as honoring their policy contract or refusing to pay a claim, this is considered bad faith. Bad faith can happen in a variety of ways, but the most common are when an insurance company wrongfully denies your personal injury claim, offers you a lower settlement than you deserve after an accident or injury, or fails to complete an investigation.

How to know if your insurance company is acting in bad faith

It can be difficult to know if your insurance company is acting in bad faith. Most people do not have the proper knowledge when it comes to the insurance industry or claims process, which makes it hard to know if you are being treated fairly and respectively by the company. However, if you believe that something is not right, there may be an issue.

Therefore, if your injury claim is denied, you should take the time to find out how the insurance company came to this conclusion. If you do not agree with their decision, it is important to reach out to a Charlotte personal injury attorney who understands insurance laws as well as what to do when an insurance company breaches their contract. The attorney will look over all the facts and determine if bad faith is involved.

What happens if an insurance company acts in bad faith?

There are state laws that address bad faith. In fact, North Carolina has implemented specific laws to hold insurance companies accountable for misleading and unfair practices. When insurance companies are found acting in bad faith, there are consequences such as requiring them to pay damages for their actions.

In most cases, the amount that the insurance company must pay for acting in bad faith exceeds the amount of the claim. This compensation pays for the individual’s time out of work, out-of-pocket expenses, lawyer expenses, and more.

How to sue for bad faith in North Carolina

People who have experienced bad faith from insurance companies do not want to see this happen to other policyholders. Therefore, they may choose to file a lawsuit to hold the insurance company accountable for their actions.

If you would like to file a lawsuit against an insurance company for bad faith, you will need to hire an attorney who is educated and trained in the laws surrounding these issues. The attorney will schedule a consultation to hear about your experience and determine if the insurance company acted in bad faith.

If you have a case, they will help you file a lawsuit against the insurance company. In the lawsuit, you will state how the insurance company acted in bad faith. This will require you to describe what exactly they did or did not do when it came to your claim. Then, your lawyer will begin working with you to show proof of how the insurance company did not act in good faith. They will look over the company’s terms of policy to ensure that everything you have stated is factual and accurate as well as whether the company’s actions go against their contracts and other promises they made.

Lastly, you will need to prove that the insurance company’s behavior caused financial hardships. A Charlotte personal injury attorney will collect the proper evidence, such as receipts, bills, and bank statements, to show this.

How can you prove that your insurance company acted in bad faith?

Proving that an insurance company acted in bad faith can be challenging. While an attorney will help you with this, there are a few recommendations we give and ask for from our clients, which include the following:

Always document the actions of your insurance company

When you believe your insurance company is acting in bad faith but are not completely sure, start writing down what they are doing. You can show this documented information to an attorney, and they will tell you if it is bad faith or not.

Save and hold onto all information you receive from the insurance company

Whether it is a letter in the mail, an email, a document that was faxed, or a voicemail, save every single correspondence that you have received from the insurance company. If it is a phone call, write down notes about the communication you received. All information can be used by your attorney as evidence for your case.

Always ask the insurance company to provide anything they say in writing

If you do not ask your insurance company to provide the information they say in writing, you will not have physical proof that it was actually said. This is extremely important because you do not want to claim that an insurance company promised something to you and have no proof in writing.

If your insurance company is being dishonest or unfair, our lawyers at Price, Petho & Associates will investigate the situation. We have experience helping many other clients who have gone through similar issues, and we are ready to help you with this serious matter as well. We have offices in Charlotte, Rockingham, and Rutherfordton to better serve you. Call us today, or submit our contact form to schedule a free consultation.