Insurance companies love to make money. But, many insurers figure out any way possible to deny, delay and defend claims when a claim is made. These corporations are so clever in what they do, that they can underpay different parts of a claim without anyone noticing. Most people who realize the insurer is underpaying will not bother to do anything about it because it might be just a few hundred or thousands of dollars. But, when the same thing happens to millions of people, the insurer is knowingly underpaying claims by millions or even billions of dollars every year.
Some insurers have made institutional choices to underpay claims. Maybe it is like the case scenario above – just a little at a time. In other cases, the insurers have become so bold due to a lack of effective regulation that they simply refuse to pay legitimate claims, or make “low ball” offers that don’t appropriately consider the value of an insurance claim. People who experience a loss caused by the insured (third party claims) and even policyholders of the insurance themselves (first party claims), are forced by insurers to litigate in order to receive adequate compensation for their insurance claims. Through advertising and media campaigns, the insurer relies upon jurors who will assume that a reasonable settlement offer has already been made, when in fact little or no offer may have been made.
An “implied covenant of good faith and fair dealing” exists by operation of law in every insurance contract between the insurance company and its policyholder. But, that requirement of good faith and fair dealing is often ignored or abused by insurers. The violation of good faith provides a party a tort cause of action in most states for an “insurance claim practice case,” or what are often referred to as “insurance bad faith” claims.
In the “first party” context between the policyholder and the insurer, “bad faith” can arise in auto insurance uninsured motorist or underinsured motorist claims, homeowner insurance bad faith, disability insurance bad faith, business interruption bad faith, commercial and business insurance bad faith claim denials, health insurance bad faith claim denials, and even life insurance bad faith claim denials. A common type of first party bad faith occurs when insurers refuse to pay claims after a natural disaster destroys a policyholder’s home or business. In some natural disaster cases insurers have shredded documents showing evidence of wind damage (that they would be required to pay) and instead hiring a different “expert” to say that the damage was caused by a water “surge” which they do not cover – thereby improperly denying insurance coverage. In the third party context, bad faith insurance claims arise when the insurer, after undertaking a fiduciary duty to protect their insured, fails to offer the full value of a claim to the injured party, thereby subjecting their insurance policyholder to an “excess verdict” above their insurance policy limit. This can happen in a variety of cases including business litigation, intellectual property, medical malpractice, motor vehicle cases, premises liability cases, negligent property damage claims, and many other areas of litigation.
There are powerful incentives for insurance companies to cheat. By intentionally denying or underpaying claims, insurers can decrease insurance premiums, which allows them to capturing more market share for people looking for the least expensive insurance rate. The result is that not only do these companies improperly profit on claims, but they also capture more money by obtaining more customers through decreased premiums. This in turn makes shareholders of the insurer more money, resulting in executive pay sometimes exceeding $100 Million. This is why insurance company executives often consult with the world’s leading business consulting companies on claim payment methods to reduce payouts – the same business consulting companies that hleped some of the world’s largest banks, insurers and corporations create the conditions leading to the 2008 financial meltdown. Consumers don’t realize they have been sold poor quality insurance coverage (prioritizing executive pay) until it is too late – when they make a claim.
Most of the time, the only way an individual policyholder can stop fraudulent insurance schemes to underpay claims or insurance bad faith, is to hire an insurance bad faith lawyer and go to trial. This allows jurors from the community to decide if the biggest, richest and most powerful insurance companies in the world will be held accountable to pay claims properly. The value of insurance as a true protection for citizens, relies upon jurors to stop harmful conduct by the insurers. Without that, every insurance company has to cheat to compete with insurers who can reduce insurance premiums by underpaying claims.
For you to be able to competently handle insurance bad faith cases and insurance fraud cases, you need to understand the insurance industry, and the most effective ways for handling bad faith claims. As it happens, Trial Guides started with a series of products aimed at lawyers handling insurance bad faith claims, starting with our very first product.
Here is a list of the top products we suggest if you want to succeed in handling insurance bad faith cases:
Top 10 Insurance Bad Faith Resources for Lawyers
The list below focuses on specific skills, knowledge and methods that will help you win insurance bad faith cases. To see all products sold by Trial Guides that relate to handling insurance bad faith cases, please click the button at the bottom of the page.
