Bad Faith Claim
An implied covenant of good faith and fair dealing exists between the insured and the insurance company. Therefore, the insurance company should act in good faith when investigating and paying claims. If the insurance company fails to act in good faith, the insured may have a bad faith claim against the insurance company.
Bad faith claims may involve several types of insurance coverage. An insured may have a bad faith claim against their insurance company for claims related to:
- Liability insurance
- Automobile insurance
- Homeowners insurance
- Disability insurance
- Life insurance
- Commercial property and liability insurance
- Health insurance
- Underinsured and uninsured motorist insurance
Dealing with an insurance company can be frustrating, particularly right after a vehicle accident. Insurance adjusters may be rude and disrespectful. However, there is a difference between failing to provide good customer service and acting in bad faith.
What is a Bad Faith Claim?
When you purchase an insurance policy, you have a right to expect the insurance company to honor the insurance contract terms. You acted in good faith by paying your insurance premiums and obeying your insurance contract terms. The implied covenant of good faith requires the insurance company to do the same.
Oklahoma law protects individuals from unethical and unlawful behavior by insurance companies. When an insurance company acts in bad faith, the insured may file a lawsuit seeking compensation for damages.
What Compensation Can I Recover for a Bad Faith Claim in Oklahoma City?
A bad faith insurance claim may include compensatory damages and punitive damages. The amount of a bad faith claim could exceed the original insurance claim you filed with the company.
Compensatory damages that you could recover for a bad faith insurance claim include:
- The original amount of your loss up to the insurance policy limits
- Financial losses you incurred because of the bad faith actions by the insurance company, including lost wages, attorneys’ fees, etc.
- The emotional distress caused by the actions of the insurance provider, including loss of reputation and embarrassment
- Financial problems caused by the denied insurance claim or delayed insurance payments
Punitive damages are intended to “punish” a defendant for intentional malice and gross negligence. In breach of contract claims, the jury may award punitive damage as an example to other parties of the consequences of engaging in similar conduct.
The cap on punitive damages for a bad faith claim is $100,000 or the amount of compensatory damages.
However, the cap may increase if the jury finds that the insurance company acted intentionally or maliciously. In that case, the punitive damages cap increases to the greater of:
- Two times the amount of compensatory damages
- The increased financial benefit received by the insurance company as a direct result of its conduct
Bad faith insurance claims are complicated actions. An attorney can review your legal options and provide additional information about the value of a bad faith claim during a free case evaluation.
Examples of Bad Faith Insurance Practices
It can be challenging to spot bad faith insurance practices if you do not have experience with insurance claims or understand contract or insurance law. Examples of instances when insurance companies act in bad faith include:
- Failing to investigate a claim by an injured party or the insured
- Refusing to provide a written explanation for a denied claim
- Not working in good faith to fairly and promptly settle a claim when liability is reasonably clear
- Requiring unnecessary and overly burdensome documentation and paperwork to delay a claim and harass a claimant
- Imposing time limits or deadlines not required by the insurance contract
- Refusal to pay a valid insurance claim
- Making threatening statements to an insured or claimant
- Undervaluing damages without a justifiable reason
- Intentionally delaying payment of a claim
- Refusing to defend a lawsuit filed against the insured
- Intentionally giving the claimant misleading or false information
- Misrepresenting the terms of the insurance contract or the law
- Pressuring a claimant to accept an unreasonable settlement offer
There are many ways that an insurance company may fail to act in good faith to settle a personal injury claim. Refusing to work to resolve claims can lead to bad faith lawsuits against the insurance company.
What is the Deadline for Filing a Bad Faith Lawsuit?
Bad faith cases generally fall under breach of contract. The Oklahoma statute of limitations for breach of contract claims is five years for written contracts, according to 12 OK Stat § 12-95 (2021).
There could be exceptions to the statute of limitations, depending on the facts of the case. You should contact an Oklahoma bad faith claim lawyer as soon as possible to verify the deadline to file a bad faith claim.
Contact an Oklahoma City Personal Injury Lawyer for a Free Consultation
Insurance companies protect their best interest by trying to limit liability for insurance claims. Unfortunately, some companies cross the line by using bad faith insurance tactics. We are here to help.