When settling a claim, an insurance company may act in “bad faith,” attempting to limit its payout. If an insurance company acts in bad faith, it can result in serious legal consequences, including having to forfeit damages beyond the original policy limit, attorney’s fees, and even punitive damages in some cases. Understanding what constitutes bad faith is essential for safeguarding your rights as a claimant and ensuring fair treatment during the settlement process. Please continue reading to learn how to pursue a bad faith insurance claim in New Jersey and how our dedicated Essex County Personal Injury Attorneys can support you throughout the process.
What Constitutes Acting in Bad Faith?
When it comes to insurance claims, bad faith occurs when an insurer unreasonably denies, delays, or undervalues a legitimate claim. Essentially, an insurance company acts in bad faith when it breaches its implied covenant of good faith and fair dealing. This covenant obliges the insurer to act with honesty and fairness. Should an insurer engage in bad faith conduct, the policyholder reserves the right to pursue legal action. Bad faith actions can take various forms, including:
- Unreasonable delay in processing claims
- Denial of a legitimate claim without a proper investigation or good reason
- Offering an unreasonably low settlement
- Misrepresentation of policy terms and coverage
- Failure to defend the insured in a lawsuit
- Threatening or coercing the policyholder
What Should I Do if I Suspect the Insurance Company is Acting in Bad Faith?
If you suspect that the insurance company is acting in bad faith following a claim, it’s important to understand the steps you need to take to protect your rights. It’s important to document everything, maintaining meticulous records of all interactions with your insurer, including emails, letters, and phone call summaries. You should obtain written explanations for denials or delays. It’s also advisable to review your policy, ensuring you understand your coverage and compare it to your insurer’s actions.
You should consider filing a complaint with the relevant state department to investigate or mediate the dispute. As mentioned, you may be able to sue for damages. Furthermore, you should consult a qualified attorney who can evaluate your case, collect evidence, and advise you on your legal avenues.
It’s important for policyholders to understand their rights and to seek legal counsel if they believe that the insurance company is acting in bad faith. At the Law Offices of Christopher T. Howell, Esq., we are prepared to help assess the situation, gather evidence, and pursue appropriate legal action to protect your interests. Connect with our firm today to learn how we can fight for you.
