Insurance Company Bad Faith

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Key Points:

  • An insurance company may be found to have breached its duty to you if, after investigation, “liability has become reasonably clear and the insurer in bad faith offers less than the amount reasonably owed under all the circumstances of which the insurer is aware.”
  • Examples of insurance company bad faith include unnecessary delays in the handling of claims, inadequate investigation, refusing to defend a lawsuit, refusing to make a reasonable settlement offer, or outlandish interpretations of an insurance policy.
  • If the insurance company’s conduct is bad enough, then it may not only owe you more money in the settlement of your case, but additional penalties or attorney’s fees too.

Insurance Company Bad Faith in Georgia – Your Questions Answered

Has your injury claim been mis-handled by an insurance company or adjuster? Insurance companies make us many promises. One of those promises is that they will operate in good faith. This means that insurance adjusters are required by law to act in the best interest of the insured, and not the insurance company. Don’t be a victim of insurance adjuster bad faith. The Millar Law Firm sues insurance companies when they act in bad faith.

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What is Insurance Bad Faith?

Traditionally, insurance companies have a unique status under the law. Because their business is all about promises – what they sell are assurances and covenants that promise to provide good faith and fair dealings – the law sees to it that those promises are enforced strictly. Unfortunately, unless you understand what is considered bad faith, you might not know how to enforce your rights under your agreement or contract with the insurance policy.
Under Georgia law, an insurance company may be found to have breached its duty to you if, after investigation, “liability has become reasonably clear and the insurer in bad faith offers less than the amount reasonably owed under all the circumstances of which the insurer is aware.” If they operate in bad faith, an insurance company can end up owing you financial penalties and possibly attorney’s fees in addition to the settlement amount.

One law that governs insurance companies, OCGA § 33-4-6, provides, in part:
“In the event of a loss which is covered by a policy of insurance and the refusal of the insurer to pay the same within 60 days after a demand has been made by the holder of the policy and a finding has been made that such refusal was in bad faith, the insurer shall be liable to pay such holder, in addition to the loss, not more than 50 percent of the liability of the insurer for the loss or $5,000.00, whichever is greater, and all reasonable attorney’s fees for the prosecution of the action against the insurer.”

What are examples of Bad Faith?

A few examples of bad faith include;

  • Unnecessary delays in the handling of claims.
  • Inadequate investigation or refusing to acknowledge the facts fully.
  • Refusing to defend a lawsuit.
  • Refusing to make a reasonable settlement offer within a reasonable period of time.
  • Unreasonable or outlandish interpretations of an insurance policy.

Things like this happen all the time in insurance claims. Insurance companies and their adjusters and lawyers are notoriously reluctant to part with their money. This is when bad faith can come into play.

Why would an insurance company act in bad faith?

Insurance companies are in the business of receiving and investing insurance premiums, not paying insurance claims. They make their money by investing insurance policy premiums and betting that the regular payments the company receives and their returns on investment will be greater than the claims it may have to eventually pay.
An insurance company’s ideal business model is to collect money and pay out little or nothing in damages. Because most people are unfamiliar with the laws governing insurance company conduct or the value of their injury or property damage case, insurance adjusters may try to take advantage of you and engage in stall tactics or make unfairly low settlement offers. If you feel like an adjuster is giving you a run-around or acting unfairly, stop providing information and stop negotiating and contact a personal injury lawyer. If the insurance company’s conduct is bad enough, not only might the insurer owe you more money in settlement of your case, the company may owe additional penalties or attorneys fees.

What is needed to prove a bad faith claim?

Each case is different, and insurance companies can act in bad faith in many ways. But, generally speaking, a claimant must prove the following things:

  • That the claim is covered by the relevant insurance policy;
  • That a valid demand for payment was made by the insured victim or policyholder and not paid within a specified time period; and
  • That the carrier’s failure to pay was negligent or motivated by bad faith.

Does this include settlements for personal property and/or injury claims?

Yes. The laws governing insurance company bad faith include most common things covered by an insurance policy, including injury claims and damage to vehicles, homes and other property. If you have a claim involving some thing or event (injury) covered by an insurance policy, the rules requiring that a company and insurance adjuster act in good faith apply.

How can I avoid being a victim of bad faith?

Never forget – insurance companies are not there to act in your best interests. If you have an injury case or claim, particularly a serious injury, we recommend that you do not discuss your claim with an adjuster or other representative from the at-fault party’s insurance company without an attorney present.
If you are contacted by an insurance adjuster (no matter how friendly or caring he or she seems), if or when you provide a recorded statement or sign a “release for medical records,” and you are not represented by an attorney, you are inviting the adjuster to find ways to harm your case and reduce the size of your claim. Many insurance adjusters will use the opportunity to take an un-represented recorded statement to find ways to deny your claim by blaming you for causing the incident that injured you. And, if you sign a release allowing the adjuster to get your “medical records,” it is almost guaranteed that the adjuster will use that release to go after your past medical history to look for some reason to deny or reduce your claim. Remember that football injury in high school 15 years ago? The adjuster will get your old records and claim that the knee surgery you now need following your car accident last month is bogus.

Before you speak to the adjuster or sign anything authorizing the release of records:

Consult with a lawyer. Even if you choose to call or contact another law firm, we urge you to seek legal advice before speaking with an adjuster or attempting to settle any injury case on your own.
Like many law firms, The Millar Law Firm offers free case evaluations. Call or email us and speak with a personal injury lawyer at no charge. We will review the facts in your case, and can advise you how to proceed. You deserve to be treated with respect and in good faith.

Have a Question?

Contact us with any questions you have and we’ll get back to you!