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Insurance Bad Faith | Auto Insurance
Colorado Insurance Disputes Attorney | John R. FullerEven the most careful drivers can get into car accidents. When you are involved in a car accident, you may believe that you are protected by your insurance company, because you own an insurance policy. Unfortunately, as many covered drivers soon realize, insurance companies across the United States are engaging in bad faith practices leaving their “covered” clients high and dry.
What is Bad Faith?Bad faith is a legal term for a tort claim that a person may have against their insurance company for committing bad acts. Implied in every insurance contract is a duty of good faith and fair dealing that is owed to the people the insurance companies insure. A violation, or breach, of this duty can result in the insured filing a tort claim against the insurance company in addition to a breach of contract claim. In other words, your insurance company is obligated to uphold their end of the insurance policy. If they fail to do so, they can be found guilty of “bad faith practices” and can be held liable.
What Type of Conduct Constitutes Insurance Bad Faith?When an automobile accident takes place, the insurance company is required to conduct a full and proper investigation of the claim and pay for damages suffered. The insurance company is also required to defend any lawsuits arising out of the accident and indemnify the insured.
Insurance companies do not always carry out their duties. Examples of insurance bad faith include:
- Failure to properly investigate and assess a reasonable value of damaged property
- Failure to indemnify an insured when sued as a result of a covered accident
- Failure to defend an insured in a lawsuit filed against him related to the accident
- Failure to timely pay a covered claim
- Refusing to settle a case when a settlement is reasonable and in the best interest of the insured
- Failure to process a claim filed by an insured