Insurance Bad Faith Information
here are two types of insurance bad faith that occur. The first type and the most often used is first-party bad faith. Every insurance company owes a duty of good faith to its own insureds. If they breach that duty of good faith, they are in bad faith to their insured. Bad faith cases can lie in the following areas:
Coverage and Defense
ailure to provide either coverage, or a defense, or both, when a claim is made against you may be a basis for bad faith. These are two different actions. Most insurance policies require your insured’s carrier to defend you in a claim that is brought against you and in addition, they require that carrier to pay the damages that are lost up to the policy limit if a verdict or a judgment is rendered against you. The duty to defend is a far easier duty to show the carrier has. The second duty is to actually pay the damages. An example may be an intentional action is brought against you in an auto collision or claim for punitive damages brought against you in an auto collision. Your insurance coverage will pay compensatory damages to the person that is injured, if you were in an accident and caused somebody else damages. Your insurance carrier is not required to pay your punitive damages if those were awarded against you. Nonetheless, under that set of circumstances, your insurance carrier does need to provide you a defense for all claims. They also need to provide you coverage for the covered portions of the claim, that is, the compensatory losses rather than the punitive losses. If they breach those duties, you have a right to recover your defense costs that you have had to occur to defend yourself and under good faith perhaps punitive damages against your carrier. You are also entitled in Ohio to interest if the insurance carrier fails to provide you a defense.
nother example of bad faith would come in an uninsured or underinsured motorist situation where your insurance carrier does not treat you in good faith and fails to provide you a reasonable settlement. If you have to file suit based on that failure, you can file suit for both the compensatory damages that you have lost, i.e., the monies that were not paid to you as a result of a third person’s negligence that was uninsured. Your auto insurance carrier under the uninsured motorist provisions of the policy makes the payment you would have received from the wrongdoer. If they fail in their duties, you may have a bad faith claim against that carrier if, in fact, they failed to evaluate your claim and handle your claim on your behalf in good faith.
Third-Party Bad Faith as a Defendant
f you caused the damage in a collision, and you caused so much damage that the damage is valued in excess of your policy, you are underinsured for that event. If the attorney or person who is making the claim has made a demand for your policy limit and your insurance carrier did not pay it, or did not offer the policy limit in a timely basis even without bring requested, your insurance carrier may be in bad faith to you. The law says if a reasonable adjuster should have made a policy limit offer and did not, and thereafter a judgment is rendered against you, which requires your personal contribution, you may have a claim against your insurance carrier for bad faith.
Third-Party Bad Faith as a Victim
f you were involved in a collision, were hurt, made a claim against the wrongdoer’s carrier for the wrongdoer’s policy limit and your injuries far exceed the amount of insurance coverage the wrongdoer has, you can commence a claim and finish the claim against the wrongdoer getting a judgment in excess of the policy limit and receive an assignment by the wrongdoer to you for the wrongdoer’s bad faith claim against its own insurance carrier for not paying the policy limit. That is also called third-party bad faith.
Our Firm’s Involvement
ur firm was involved in the first verdict in the State of Ohio where a jury returned a verdict against an insurance carrier for third-party bad faith in a claim that Scott Stewart handled where a demand for policy limits were made for a devastatingly injured client that had a $50,000.00 policy limit. That demand was not met with an offer of limits even though the demand was specific that if it was not met within a certain time, the wrongdoer would be forever exposed to a judgment of the full value of the claim which was well in excess of the policy limit. There was a limited time frame when the carrier could offer the policy limit once that time passed, the time to settle for the policy limited ended.
The jury then awarded the total amount of the judgment against the wrongdoer for the insurance company’s bad faith.
Many bad faith claims have been handled by the firm. We have handled bad faith claims in every possible area of failure. We are currently handling a case for failure to provide a defense that cost a corporate client millions. We have handled bad faith claims in uninsured or underinsured motorist situations; others for failure for the insurance company to offer the policy limit in a reasonable time frame; and others for failure to provide coverage. In other words, in as many areas that an insurance company can be in bad faith, this firm has handled claims.
Do you have questions regarding a insurance bad faith claim?
There is no charge for the initial consultation, whether by e-mail, telephone or by office visit. So, please do not hesitate to set up an appointment today. Call us at (216) 781-2258 or toll free at 1-800-781-2259 to speak to one of our attorneys about your insurance bad faith issue. Alternatively, you can fill out our contact form to let Stewart & DeChant know how we may assist you with your insurance dispute legal matter.
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