Insurance Bad Faith

Is your insurance company denying payment for a claim? Did they not pay enough? Our Colorado Springs insurance bad faith attorneys at Springs Law Group are ready to help.

You purchase insurance as a way to hedge against disaster. You believe you are protecting yourself from financial ruin if a disaster strikes. In other words, you invest in insurance as a way to garner protection from calamity. Then, disaster strikes. Your home is destroyed, your car it totaled, your loved one lost their life. What do you do now?

In an ideal world, you send in your insurance claim and wait for your payment. You then use this money to put your life back together. However, what if just when you needed to cash in on your investment, your insurance company denied your claim? They come up with a reason that you don't deserve payment. What now?

Fortunately, there is legal recourse and Springs Law Group can help you. Insurance companies have to obey the law, and therefore, they must pay you what is fair. If they won't, you need to get legal help quickly in order to rectify the situation. Call us today for a free 30-minute consultation to learn if you have a valid insurance bad faith claim: (719) 301-5055

What is Insurance Bad Faith?

To explain bad faith insurance when it comes to a claim, first you have to understand how an insurance claim should work. Ideally, if you file a claim with your insurance company, they should act in “good faith” to pay the claim. This is legally required in any state. However, when an insurance company acts unreasonably in trying to get out of, or pay less on, you claim, this is what is called acting in “bad faith.” Insurance companies are required to act reasonably in handling your claim. Therefore, a bad faith insurance claim or lawsuit could come about if your insurance company unreasonably refuses to pay your claim, or unreasonably delays in paying it.

It's important to keep in mind that not every disagreement with between you and your insurance company constitutes a bad faith claim. To determine if your specific situation falls in the bad faith category, come in for a free consultation. We at Springs Law Group are well versed in dealing with insurance companies. We can explain to you why your situation either does or does not constitute a bad faith claim. If it does, we will guide you through the process, serving as your advocate. As your advocate, we will fight to get you what you deserve.

What Constitutes an Insurance Bad Faith Claim?

The following are some of the most common reasons insurance companies are sued for “bad faith.” They are good examples of what constitutes a bad faith insurance claim:

  • The insurance company denies coverage unreasonably.
  • They fail to communicate important information to you as their customer.
  • They fail to investigate your claim in a reasonable manner.
  • They refuse to pay your claim and don't investigate your claim properly or at all.
  • They unreasonably delay in investigating or paying your claim.
  • They fail to either deny or confirm coverage within an appropriate amount of time.
  • They fail to either deny or pay your claim within an appropriate amount of time.
  • They offer you less money to settle your claim. Less money than is fair.
  • They fail to come to an appropriate or fair settlement, even when their liability is proven.
  • They fail to explain why they denied your claim.
  • They fail to negotiate the settlement of your claim.
  • They fail to respond within a set time-limit.
  • They fail to disclose all policy limits.

When Should You Hire an Insurance Bad Faith Lawyer?

Taking on an insurance company is no easy task. Sure, you can file a complaint with your state's Department of Insurance without the help of an attorney. However, to begin the process of a bad faith insurance claim, getting the help of an attorney is wise. They know what the specific laws are in your state that govern the insurance company. As such, they will be able to advise you on the best course of action. They also know the tricks insurance companies use to try to get out of paying your claim.

Examples of Real-Life Insurance Bad Faith Claims:

There are many types of bad faith claims that go through the court system every year. The following are a few cases that will give you an idea of how these cases work. Keep in mind that these are for educational purposes only. Don't expect the same results as these cases in your particular situation. Each case is vastly different, and there is no way to duplicate results. In addition, insurance laws vary from state to state. However, the following examples are helpful in giving you a general idea of what kind of cases might constitute bad faith:

  • Boicourt v. Amex Assurance Co.: In this case, a family settled for over $2 million after their child was severely injured in a car accident. The insurance company's policy only provided up to $100,000 in coverage. However, because the insurer did not disclose the policy limits, in bad faith, the family was awarded much more than their policy originally provided.
  • David Clayton v. United Services Automobile Association: In this case, a jury agreed to award the parents whose only child was killed in a vehicle accident $3.9 million. The insurance company's original offer for compensation was $10,000, based on a policy that capped off at $300,000. The jury found this to be unreasonable and classified it as bad faith.
  • Matson Terminals v. Home Insurance Co.: The Home Insurance Company refused to pay a claim for $10 million due to earthquake damage. The jury found the denial to be in bad faith and was based on a policy exclusion. Therefore, $11,000,000 in punitive damages was awarded by the jury, and the appeals court added another $23.5 million in compensatory damages. They based this ruling on the fact that the insurer believed they were covered before they began repairs on the property. They felt they were covered in part because the insurer led them to believe they were protected.

How Are Insurance Bad Faith Lawyers Compensated?

Many bad faith insurance lawyers are paid a contingency fee. This means they will work for you without upfront compensation. They will take a percentage of your settlement once the case is finished as their fee. In most cases, lawyers set their contingency fee at around one-third if your case settles before going to trial. If it goes to trial, you can expect to pay anywhere from 33 to 50%, depending on the complexity and riskiness of your case, out of your settlement or jury award.

Springs Law Group Is Ready to Help

Don't go it alone. If you feel you have a legal case insurance bad faith, contact our expert insurance bad faith lawyers in Colorado Springs today.

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Springs Law Group
6215 Corporate Dr, Suite 101
Colorado Springs, CO 80919

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