Auto insurance companies seek always to protect their bottom line. Many customers find themselves on the other end of a frustrating tug-of-war as they seek to obtain compensation for legitimate losses.
One of the ways the law keeps insurers in check is by allowing bad faith claims, either by the policyholder or sometimes a third party. An insurance company that acts in bad faith – by failing to settle, not timely responding to a claim, offering a sum that is far too low when facts are not in dispute – can be penalized by an order to pay triple damages. Bad faith insurance claims are litigated separately from the auto accident claims.
Some examples of bad faith include:
- Refusing to pay a claim it owes;
- Not timely paying a claim it owes;
- Requiring paperwork that is unreasonable or unnecessary;
- Failing to explain why a claim is denied;
- Refusing to settle a claim when doing so is appropriate.