Bad Faith Insurance Claims Lawyers

September 20, 2022 | Attorney, Matthew Dolman
Did you recently file an insurance claim after a car accident, property damage incident, or another unforeseen event only to have it unfairly minimized or outright denied? Does it seem like you can never contact your insurance adjuster when you need them? If your insurance company neglected or refused to honor the terms of the policy your premiums purchased, you might be the victim of bad faith insurance practices. State and federal laws require insurance providers to follow fair practices when dealing with policyholders and policyholder claims. These requirements are typically based on the concept of good faith. An insurance provider acts in good faith when they perform their duties honestly, faithfully, and without fraudulent intent. In practice, this means investigating claims properly, responding to inquiries promptly, and paying valid claims fully. These laws are on the books for a reason. Some insurance companies act in bad faith, dragging their feet during investigations, undervaluing covered assets or events, and rejecting claims without justification. When these bad faith practices occur, policyholders often get burned twice. They lose the benefits they were owed according to the terms of their policies and suffer incidental losses they would never have incurred if their providers had acted in good faith. If you believe your insurance company has acted in bad faith, do not give up hope. You might deserve compensation for your losses from a bad faith insurance claim. In a bad faith insurance claim, you could obtain money for your original losses and any losses you incurred due to your provider's bad faith practices. The attorneys of Dolman Law Group Accident Injury Lawyers, PA can help you by evaluating your situation to determine whether you have grounds for a case. Contact our bad faith insurance claims lawyers now to discuss your circumstances with a qualified lawyer in a free consultation.

Why Choose Dolman Law Group Accident Injury Lawyers, PA?

When you purchase insurance, you reasonably expect access to the benefits outlined in your policy. Unfortunately, many insurance policyholders are stunned and dismayed to learn that filing an insurance claim is just the beginning of their problems. Instead of the total and fair compensation they need to cover their expenses and move forward, some policyholders receive only bad faith attempts to resolve their claims. At Dolman Law Group Accident Injury Lawyers, PA, our distinguished legal team represents individuals and small businesses, never big corporations. We know how frustrating it is when the insurance company denies seemingly valid claims and how daunting it can be to go up against huge insurance companies as the little guy. That's why our attorneys are dedicated to leveling the playing field for our clients. Here are just a few examples of what sets us apart from other firms:
  • Decades of experience—Our firm was founded in 2004 with the mission of providing the same type of personalized and compassionate advocacy we would expect for our loved ones. Since then, our team has expanded to include several gifted attorneys with more than 120 years of combined experience across various legal practice areas. We work tirelessly to protect the best interests of those we represent and demand fair compensation for victims across the U.S.
  • Reputation and results—The determination and experience we bring to the table have allowed us to secure millions of dollars in fair compensation for our deserving clients. Due to our strong track record of outstanding case results, insurance companies and other law firms recognize and respect us.
  • A comprehensive approach—We understand that you have a lot on your plate if you have already filed an insurance claim. That's why we are happy to handle every aspect of your claim from start to finish, including managing necessary paperwork, looking out for filing deadlines, communicating with other parties on your behalf, and negotiating tirelessly to maximize your case value.
  • Convenience and affordability—Our firm has convenient office locations nationwide, so help is never far away when you need us. We are prepared to meet with you at your convenience, virtually or in person, when face-to-face meetings are possible. And because we know that many of our clients come to us in tight financial spots, we offer affordable rates and payment options for every budget. We accept cases on a contingency basis, which means we charge you nothing up-front or out-of-pocket to begin work on your case. You only pay us a percentage of your settlement if and when we secure compensation for your claim.

Good Faith Insurance Laws in the U.S.

Insurance plays a vital role in American society. By paying into insurance systems, policyholders pool their risks together, providing financial security and stability to both individuals and businesses. Many of us are all too familiar with the fact that insurance coverage can mean the difference between a full recovery and total ruin after an unfortunate event. In fact, insurance is such a key element in the modern world that we are often required by law to purchase coverage for our homes, vehicles, companies, personal health, and more. Many courts have recognized the services rendered by insurance companies as vital to the public interest. And companies that provide such essential services are expected to seriously consider the public interest at all times, sometimes even placing the public interest above the company's own interest in making profits, when appropriate. In some cases, this means an insurance provider ought to go above and beyond the basic expectations outlined in its policy agreements. After all, acting in good faith involves inherent elements of human decency and understanding that often transcend policies. One key consideration in any interaction between an insurance company and a policyholder is that the insurer always has the upper hand. Insurance providers are in control of drafting their own policy agreements, establishing rates, investigating claims, and deciding if and how much to pay for those claims. Additionally, providers have vast industry expertise, negotiating experience, and legal and financial resources that far surpass those of most insured people. This substantial gap in leverage is all the more important because an insurance company's primary goal is always to earn money, a goal that often directly opposes its duty to pay policyholder claims. Because the insurance industry is essential, it is closely regulated. Every state has laws and procedures for monitoring insurance companies, their policy rates, how they market their products, and how they handle claims. To make sure providers take their positions of public trust seriously, state legislatures and court systems have developed standards and rendered decisions to define what “good faith” insurance practices look like. Good faith insurance laws stipulate that every policy contains an implicit understanding that the insurance carrier will act in good faith, even when policies do not spell this information out explicitly. When insurance companies act in good faith, policyholders can count on providers to:
  • Treat policyholder interests and claims with the same consideration as the insurance provider's own interests
  • Assist policyholders with initiating, understanding, and navigating their claims
  • Inform policyholders of all potential coverage types, benefits, and deadlines that may apply to their claims
  • Respond promptly to claim inquiries and communications from policyholders
  • Communicate with policyholders regularly to keep them updated on active claims
  • Adopt and implement reasonable standards for evaluating and adjusting policyholder claims in a fair and timely manner
  • Conduct complete, proper, and timely investigations into policyholder claims at the company's own expense
  • Estimate the values of covered replacement costs fairly, without deducting depreciation costs from claim values
  • Refrain from denying claims, wholly or in part, based on information or evidence that is biased, suspicious, speculative, or incomplete
  • Avoid misrepresenting factual information or the specifics of policy provisions
  • Refrain from ignoring evidence in support of valid claims or making unreasonably low settlement offers to policyholders
  • Refrain from discriminating in the claims settlement process based on protected characteristics like gender, race, income, disability, or sexual orientation
  • Provide clear, written explanations when issuing partial or complete denials, which should include details from relevant policies that provide the basis for denial
Unfortunately, insurance carriers do not always act in good faith, as they are legally and morally obligated to do. When an insurance company neglects or refuses to act in good faith, it may result in a “bad faith” insurance scenario that leaves its policyholders in the lurch. Many policyholders are shocked and frustrated by their provider's subtle and creative methods to minimize or reject valid claims. When insurance companies use underhanded tactics to avoid paying their fair share, policyholders may be entitled to substantial compensation they can obtain through bad faith insurance claims.

How Much Is a Bad Faith Insurance Claim Worth?

Bad Faith Insurance Claims LawyersBad faith insurance claims are important failsafes that allow consumers to hold profit-driven insurance providers legally and financially accountable for their actions. The following data and trial verdict details published by the National Association of Mutual Insurance Companies illustrate just how frequently bad faith practices occur and how much compensation victims of bad faith insurance scenarios can recover:
  • In one recent year, almost 11,000 regulators in the U.S. were responsible for monitoring insurance companies.
  • That same year, there were more than 1,783 insurance company investigations into things like financial practices and market conduct.
  • State budgets for insurance regulation programs have grown to more than $1.4 billion combined.
  • In Gruber v. Marshall, a Kansas court awarded a policyholder roughly $11.6 million for a claim against a policy with a limit of $100,000. The court determined that the policyholder's estate would have been protected from liability if its provider had offered full compensation promptly.
  • In Boicourt v. Amex Assurance Co., a California court awarded more than $2 million to a policyholder whose carrier refused to disclose the limits of the available policy, which provided $100,000 in coverage.
  • In Matson Terminals v. Home Insurance Co., a California court awarded a policyholder $23.5 million in compensation and an additional $11 million in punitive damages for the unfair denial of a $10 million earthquake claim.
  • In Metropolitan Property and Casualty Insurance Company v. Hedlund, a California court ordered an insurance company to pay $5 million in compensation for failing to respond promptly to a claim against a $250,000 policy.
  • In O'Neill v. Gallant Insurance Co., an Illinois court awarded a policyholder more than $3 million for extra-contractual losses they incurred due to the insurance company's bad faith actions regarding a claim against a $20,000 policy.
So, how much can you recover for your own bad faith insurance claim? When you file a bad faith insurance claim, you are effectively seeking compensation for two different categories of losses. First, there's the money you would have gotten in benefits from the original claim against your insurance policy if your provider had acted in good faith. With a successful claim, you could be entitled to receive as much as three times the value of this original claim amount you were owed. Second, there are the losses you incurred directly from the insurance company's bad faith practices. These losses could include:
  • Out-of-pocket medical bills you would never have incurred if you had coverage for prompt hospital visits, diagnostic tests, and prescribed treatments
  • Wage losses you incur as a result of your inability to work, if your provider's bad faith insurance practices contributed to delayed medical care or return to work
  • Projected losses in your future earning potential, if your provider's bad faith practices contributed to a worsening of your condition that left you disabled
  • Revenue losses your business suffers due to unnecessarily long closures caused by providers that stall and drag out the claims process
  • The intangible costs of the additional pain and suffering you would never have had to endure if not for bad faith insurance practices
  • Any legal costs or attorney's fees you incur in the pursuit of your bad faith claim
Demanding compensation from a bad faith insurance claim can be complicated and intimidating, especially when you feel you have already done everything possible to secure the benefits you are owed. Fortunately, you don't have to sit idly while your claim is unfairly undervalued or denied, and there's no reason to face the big insurance companies alone. The trusted bad faith insurance lawyers at Dolman Law Group Accident Injury Lawyers, PA can support you every step of the way by:
  • Answering your questions and evaluating your case at zero charge or obligation to you during your initial consultation session
  • Helping you understand how the insurance laws work in your state and how they apply to your unique situation
  • Conducting an independent investigation into your claim to determine how much you are owed and identify possible bad faith insurance practices
  • Gathering valuable evidence for your claim, such as documentation of your losses, statements from reliable witnesses, and testimony from experts
  • Communicating with insurance providers and other attorneys on your behalf
  • Preparing demand letters, legal motions, and other documentation for your case
  • Representing you in court during mediation, hearings, trials, and appeals

Common Types of Bad Faith Insurance Practices

When you pay your monthly premiums as a policyholder, you have the right to expect the legal and financial protection you have purchased with your payments. Unfortunately, many insurance companies rely on bad faith practices to prioritize profitability over their policyholders. Common examples of these bad faith insurance practices include:
  • Giving bad recommendations or advice—Insurance providers are far more familiar with the ins and outs of their policy agreements than their customers. Sometimes, insurers act in bad faith by knowingly providing bad recommendations or lousy advice when policyholders come to them for help.
  • Neglecting or refusing to respond to inquiries—When policyholders file claims, they deserve to know what's going on. Insurance companies that fail or refuse to respond to reasonable questions and other communications from their customers may be liable for bad faith insurance practices.
  • Misrepresenting terms of policy agreements—This could include intentionally providing policyholders with confusing information, making contradictory statements, or twisting the meaning of certain words or provisions in insurance policies in different circumstances.
  • Using false or biased evidence to deny claims—When insurance companies investigate claims, they have an obligation to conduct those investigations in good faith. Relying on obviously false, distorted, or biased evidence goes against this important duty.
  • Neglecting to investigate properly or promptly—In addition to using evidence gathered through their investigations, insurance companies must conduct those investigations promptly and thoroughly. Bad faith insurance providers often conduct superficial, incomplete, or intentionally slow-moving claim investigations.
  • Refusing to cover valid policyholder claims—In the most blatant scenarios, insurance carriers simply refuse to pay valid claims, even when they are explicitly covered according to the terms of the policy. When this happens, providers often use vague or ill-defined terms to justify their decisions.
  • Undervaluing covered assets or valid claims—One of the easiest ways for providers to decrease their payment obligations is by reducing the value of covered assets, properties, or events. They could insist on valuations from “preferred” appraisers or deduct depreciation costs.
  • Delaying or refusing to make claim payments—The timing of a claim payout can be just as important as the amount. When policyholders don't get their benefits promptly, they can incur additional losses unnecessarily. Bad faith insurance providers know this but still choose to delay settlement payouts or refuse to pay compensation at all.
  • Neglecting to provide explanations for denials—Insurance companies must provide clear reasons for partial or total claim denials so customers know how to respond. When insurers act in bad faith, policyholders may receive only murky or convoluted excuses in response to their claims.
  • Refusing to defend policyholders from lawsuits—Some insurance policy agreements include a “duty to defend,” which obliges insurers to appoint and pay for legal representation when policyholders are subject to litigation. In bad faith scenarios, carriers may refuse to provide counsel to customers as promised.
  • Altering or canceling policies without approval—This bad faith practice may include making arbitrary changes to deductible requirements or imposing surprise waiting periods before or during the claims process. Sometimes, providers may even try to cancel policies without notice to avoid paying out valid claims.
Every insurance claim is different; these are just a few examples of how insurance providers can act in bad faith. Grounds for a bad faith insurance claim may exist any time an insurance company operates in an unreasonable, unfair, deceptive, or fraudulent manner. If you know or suspect you have a claim against an insurance company acting in bad faith, you should contact a seasoned attorney immediately.

Demanding Compensation When Providers Act in Bad Faith

To initiate a bad faith insurance claim, you'll need to provide written notice of the claim to both your insurance provider and your state's Department of Financial Services before you file your suit. In your notice, you should include the specific obligations the provider refused to uphold, the names of specific individuals or organizations involved, the facts and circumstances of any bad faith practices, and the text of any statutory provisions the provider violated. Once you have issued the proper notices, it's time to file your claim in the appropriate court system. Your attorney can help you prepare the paperwork and adhere to the requirements. After the preliminary steps are out of the way, your case will proceed to a process called “discovery.” During discovery, each side can request evidence and information from the other side to flesh out their respective cases. In many cases, settlement negotiations continue throughout this process, sometimes right up until the court reaches its verdict. If your case has not already settled at this point, it will move forward to trial, where a judge or jury will hear your case. The judge or jury will review each side's facts, evidence, and arguments before ultimately rendering a verdict. When trials make it all the way to verdict, the court's decision is final, and both parties must abide by it. However, if either side disagrees with the verdict, they have the right to file an appeal asking a higher court to reconsider the decision. Filing and litigating a bad faith insurance lawsuit is challenging and complex, but choosing the right lawyer doesn't have to be. At Dolman Law Group Accident Injury Lawyers, PA, our experienced bad faith insurance lawyers can stand by you and help you find the best way forward at every stage of your claim.

Frequently Asked Questions About Bad Faith Insurance Claims

Let's look at some straightforward, no-nonsense answers to some of the questions our attorneys are asked most frequently about bad faith insurance claims:

Why do providers engage in bad faith practices if they are illegal?

Profitability is the driving force behind nearly every bad faith insurance practice. When providers minimize, deny, and delay claims, they reduce their operating expenses and get to keep more money for themselves. Most policyholders do not recognize bad faith practices or fight back by taking providers to court. Because of this, companies are often willing to take the legal and reputational risks since they know it is unlikely anyone will ever hold them accountable.

Are there different types of bad faith insurance claims?

Yes. There are “first-party” bad faith insurance claims, which involve insurance policies meant to cover losses you incur as the policyholder. If you can demonstrate that your first-party insurance provider minimized or denied your claim in bad faith, you may have a first-party bad faith insurance claim. There are also “third-party” bad faith insurance claims, which involve policies you purchase to protect yourself legally and/or financially if you are ever at fault for someone else's losses. You might have a third-party bad faith insurance claim if another party filed a claim against you and your liability insurance provider refused to defend, indemnify, or settle that claim in defiance of your policy agreement.

Is there a time limit on bad faith insurance claims?

Yes. Time limits vary from state to state, but most court systems require bad faith insurance victims to file their associated lawsuits within two to six years after the bad faith practices occurred. Observing these restrictions is essential even if you never intend to take your case to court because your ability to threaten a lawsuit is your primary bargaining chip during settlement negotiations with the insurance company.

What to Do if You Suspect Your Insurer Is Not Acting in Good Faith

If you believe you may be the victim of bad faith insurance practices, the first thing to do is step back and evaluate your case objectively. After all, when you file an insurance claim, you're already in a stressful situation. Dealing with the frustration and loss of an unforeseen injury, accident, or breach can easily cloud your judgment, so it's important to consider your situation with a calm, clear head. It may feel like an insurance company is acting in bad faith by delaying your claim when it just takes a long time to investigate and review some claims. And just because you don't receive a settlement offer as high as you were expecting doesn't necessarily mean your claim was undervalued. It could just be that you didn't consider certain factors when you worked through the estimates yourself. Sometimes, though, insurance companies really do act in bad faith. If you know or suspect this is true of your insurance company, one of the most important steps you can take is to force your provider to commit to its decisions in writing. If your carrier decides that your claim is not worth the amount you asked for, submit a written question in response, demanding that the company put its decision on paper. Once your provider has reduced its justification for your claim decision to a written explanation, they will have a hard time changing or backtracking if they are ever under oath. Next, you'll want to gather as much evidence as possible to support your claim. You must demonstrate that the insurance company took deliberate actions against you or your claim without any reasonable justification for doing so. You can present evidence, such as records of communications with your provider and documentation related to your policy agreement. Your attorney may even be able to help you access internal documents from the insurance company to show exactly how they handled your case. You will also need to show proof of the additional losses you incurred due to your provider's bad faith practices, including unnecessary injuries, property damage, and business or income losses. Finally, you will need to show that you took the appropriate steps and upheld your end of the policy agreement when you filed your original claim. For instance, if you had an injury claim, you could collect evidence showing that you visited your doctor promptly and followed their prescribed care plan. You don't want to give the other side any excuse to imply that your actions contributed to either the decision to deny your claim or the losses you incurred as a result. To that end, be sure to watch what you say to others or what you post online while your claim is pending, as anything you say can be taken out of context and used against you. In fact, while there are many aspects of your claim that you can handle yourself, it's usually best to simply have your lawyer communicate with insurance companies and other parties on your behalf at all times.

Contact a Knowledgeable Bad Faith Insurance Claims Lawyer Now

Personal Injury Lawyer
Matt Dolman, Bad Faith Insurance Claims Lawyer
Bad faith insurance practices are grounds for legal action on behalf of policyholders who suffer due to their providers' negligent, fraudulent, or deliberate actions. With a successful bad faith insurance claim, you can recover the compensation you should have received initially, plus additional money for losses you suffered as the result of a bad faith claim denial. If you have questions about your right to file a bad faith insurance claim, do not hesitate to contact the legal team at Dolman Law Group Accident Injury Lawyers, PA at 833-552-7274. We can address your concerns and review your case for free when you contact our firm for your initial strategy session.


Matthew Dolman

Personal Injury Lawyer

This article was written and reviewed by Matthew Dolman. Matt has been a practicing civil trial, personal injury, products liability, and mass tort lawyer since 2004. He has represented over 11,000 injury victims and has served as lead counsel in over 1000 lawsuits. Matt is a lifetime member of the Million Dollar Advocates Forum and Multi-Million Dollar Advocates Forum for resolving individual cases in excess of $1 million and $2 million, respectively. He has also been selected by his colleagues as a Florida Superlawyer and as a member of Florida’s Legal Elite on multiple occasions. Further, Matt has been quoted in the media numerous times and is a sought-after speaker on a variety of legal issues and topics.

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