A Michigan bad faith insurance lawyer can help you if you were treated unjustly by an insurance company.
Buckfire Law files lawsuits against insurers that wrongfully delay and deny claims.
Insurance companies have a legal and contractual duty to treat policyholders fairly. Unfortunately, many carriers refuse coverage for illegal and unlawful reasons.
When this happens, the insured can file a bad faith insurance lawsuit against the company. These cases seek payment of benefits and coverage for claims actually covered under a policy.
In many lawsuits, the court can award attorney’s fees and judgment interest against the insurance coverage.
- What does bad faith insurance mean?
- Examples of bad faith insurance
- Can I sue insurance companies for bad faith?
- How to file a bad faith insurance lawsuit
- Damages in a bad faith insurance lawsuit
What Does Bad Faith Mean in Insurance?
Bad faith is a legal term that refers to a legal claim that an insured person can bring against the insurance company. These claims arise when an insurer acts illegally in its handling of a claim.
In Michigan, the definition of bad faith is “arbitrary, reckless, indifferent, or intentional actions or disregard of the interests of the person owed a duty.”
Bad faith generally refers to the breach of an insurance contract.
Bad faith often occurs when the insurer refuses its obligations under a policy, such as paying a claim, defending a lawsuit, or performing an investigation.
Other times it happens when the insurer waits an unreasonable length of time before paying a claim and thereby caused harm to an insured.
Examples of Bad Faith Insurance Practices
There are many examples of insurance bad faith practices. Adjusters and company executives are notorious for unlawful acts that leave their insureds in bad situations.
Common examples include:
Denying a Claim without a Reason
An insurance company must give a reason to deny a claim presented by a policyholder. It cannot just send a letter stating “your claim is denied.”
Rather, it must provide a basis citing to the facts of the claim and the specific policy exclusion relied upon to deny the claim.
It should be clear enough for the insured to understand the basis of the denial and must be a legitimate reason to not pay the claim.
Unreasonable Delays in Investigations
Unreasonably delaying an investigation of a claim causes great harm to a policyholder.
Many times, the adjuster will ignore phone calls or not act urgently in visiting a property damage scene.
The tactic is done with the hope that the insured will give up pursuing a claim due to frustration over the delay.
Unreasonable Delays in Payments
This insurance tactic is common and causes great damage to an insured.
Many times, the adjuster will delay sending payment on an approved claim just to hold the money longer. This impacts the ability to make timely repairs, find suitable housing, or sustain a business.
Refusing to Pay the True Value of a Claim
The truth is that the insurance company would rather have money in its bank account than in your account.
Companies often intentionally undervalue claims and offer substantially less money than a claim is worth. This leaves the insured short of funds to make repairs, relocate, or to cover the loss.
Denying a Legal Defense of a Valid Claim
Insurance companies often have a legal duty to defend a lawsuit even if there is a question about the coverage for a claim.
When an insurer is sued by another person, the insurer is required to provide a legal defense. Many times, the carrier will refuse to provide a defense even for a covered claim.
By denying a defense to a claim, the policyholder is left facing a lawsuit without an attorney.
Many people simply cannot afford the legal fees associated with defending a case. As such, the insured is facing a potential money judgment that can lead them to bankruptcy.
Under the law, the insurance company is still required to provide a legal defense to a lawsuit while the coverage issue is investigated. The failure to provide a defense can give rise to a bad faith claim.
Misrepresenting the Meaning of Policy Language
Insurance policies are complex contracts written by insurance company lawyers. They are long, confusing, and difficult to understand.
In many cases, even lawyers and judges fumble over the true meaning and intent of a provision in a policy.
Insurance adjusters know that most people simply do not understand the policy terms. They often tell the insureds that a loss is not covered, or excluded, from a policy when it is not.
It is important to hire an experienced insurance lawyer to review your policy to determine if you were misled by the adjuster.
In some circumstances, a reduced insurance payout will cause a homeowner or vehicle owner to be short on a loan.
The result is having to pay a mortgage or car loan for property that was destroyed in a fire, flood, or due to theft. This creates tremendous economic hardship on the insured person.
Accusing the Policy Holder of Fraud or Arson
The insurance company often tries to turn the table on an insured to deny payment of a claim. The adjuster will argue that there was fraud or arson involved to refuse payment.
Adjusters commonly accuse a policyholder of fraud when it relates to a no-fault insurance claim and arson when a person files a fire damage claim. This bad faith tactic puts the insured on the defensive and concerned about potential criminal charges when in fact no crime was committed.
An insurance company should never threaten you with legal action or criminal charges when you make a legitimate claim. It is unlawful intimidation and illegal.
Can I Sue the Insurance Company for Bad Faith?
You can sue an insurance company for bad faith if it unlawfully delayed, denied, or refused your claim.
A lawyer that specializes in insurance cases will review your policy and the denial letter.
If the denial of payment or refusal to defend you was without a proper basis, you can file a lawsuit.
Our firm recently filed a bad faith insurance lawsuit arising from a wrongful death claim. The insurance company refused to provide a legal defense to named defendant.
We obtained a judgment against the defendant and he assigned us the right to sue his insurance company.
In that case, the insurance adjuster improperly denied both the claim and the defense. However, it was the refusal to provide a lawyer that caused severe prejudice to the defendant.
We ultimately won a $975,000.00 settlement from the insurance company simply because it did not defend the policyholder.
How Do I File a Bad Faith Insurance Lawsuit?
A bad faith insurance lawsuit is similar to any other contract or business lawsuit. The basis of the case is the interpretation of the insurance contract and how it applies to a submitted claim.
Like other contract cases, a lawyer will prepare a Complaint and file it at the courthouse. It will then be served on the insurance company to defend the cases. This is the beginning of the litigation process.
In most cases, the judge will be asked to interpret the language and rule in favor of one of the parties.
When the language is subject to multiple meanings, it may be left for a jury to decide who wins the case.
What are the Damages in the Lawsuit?
The main case in Michigan damages awarded for bad faith is Kewin v Massachusetts Life Ins Co. 16 (1980).
In that case, the Michigan Supreme Court set the legal precedent for the limits imposed on damages awarded to a plaintiff who successfully proves an insurer acted in bad faith.
In general, the damages consist of the losses suffered by the insured due to the breach of the insurance contract.
Damages can also include contract interest, judgment interest, and attorney’s fees.
There is a remote chance of winning exemplary or punitive damages in certain egregious cases.
Get the Best Michigan Bad Faith Insurance Lawyers
You need an attorney who regularly battles with insurance companies and their lawyers at the courthouse.
The company has unlimited financial resources to fight your case. You will not win unless you have a trial tested legal team on your side that can bring you a victory.
We will represent you under our No-Fee Promise. This means you will not be charged a legal fee unless you receive a settlement. And, we do not get paid until you get your settlement check.
Call us now to tell us your insurance story. An experienced attorney will determine if you can sue the insurance company.
If you were the victim of bad faith insurance practices, we will file your lawsuit.
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Flint, MI 48502
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