There is basic knowledge that insurance companies in Montana and elsewhere are bound by legal and ethical obligations when it comes to acting in good faith with their policyholders. Unfortunately, this does not always occur when insurance claims are filed in accordance with a policyholder’s auto, home or life insurance policy. When insurers fail to uphold their duties and obligations, this is known as bad faith insurance.
Bad faith insurance
At the Ramler Law Office, P.C., we understand the level of trust and reliability policyholders have in their insurance carriers, which is why it can be a significant detriment to them when a claim is denied or mishandled. Our law firm understands that some claims are erroneously denied or improperly processed and paid by the insurer to protect their own bottom line.
Our experienced attorneys know the strategies insurance companies will employ to guard their interests and funds. Many of these approaches are unfair and unethical, making it imperative that policyholders understand what bad faith insurance looks like, the legal options available to them, how to prove their claim and what damages are recoverable.
Elements and recoverable damages
In simple terms, a bad faith insurance refers to any attempts by the insurance company to renege on its obligations to their clients. In order to establish a bad faith insurance claim, generally four elements must be proven. First, a valid and enforceable insurance contract between the parties needs to exist. Next, the policyholder must demonstrate that they have fulfilled their obligations under the contract, such as paying premiums and providing timely and accurate information.
The third element is the insurer’s unreasonable conduct. Examples of this include the refusal to pay on a legitimate claim, delaying payments of a claim without cause or reason, offering significantly less compensation that what is owed, failing to conduct a prompt and thorough investigation, misrepresenting the terms and coverage limits of the policy in question, threatening or coercing a policyholder and other similar unfair or unethical practices.
The final element is causation and damages. This requires proof that the bad faith actions by the insurer directly caused harm to the policyholder. Recoverable damages for these harms include financial losses, emotional distress and other similar damages.
Bad faith insurance matters are complex, requiring a thorough understanding of the legalities involved. Policyholders who suspect bad faith conduct by their insurer should understand their legal rights and options to pursue remedies. By holding insurers accountable for their actions, policyholders can ensure that they receive the coverage and compensation they are entitled to.