Bad Faith Claim in Alabama
When you get into a car accident and file a claim with your insurance company, you expect the agent to act within the guidelines of your policy and pay the claim without delay. Unfortunately, this doesn’t always happen. What you need to keep in mind is that insurance companies are for-profit businesses. Like any business, your insurer tries to cut costs wherever it can. That is understandable. What isn’t acceptable is when it acts in bad faith and denies or delays your claim without reason.
If you’re at fault in an accident, your insurance company owes a duty of care to pay for the injuries and property damage incurred by the other party. That is because Alabama is a “fault” state when it comes to auto accidents. Either the insured or the party filing a claim can run into problems with bad faith.
What Constitutes a Bad Faith Claim?
The agent representing your insurance company is not acting in bad faith simply because the two of you disagree on the value of your claim. Where this crosses over into bad faith territory is when the insurance adjuster refuses to provide a reason for stating a lowball offer or even denying the claim altogether. You also want to look out for poor settlement tactics, such as pressuring you to accept an offer without talking to an attorney. Other examples of actions that could qualify as bad faith include:
- Delay or complete lack of acknowledgement of your original claim letter
- Failing to complete a prompt and proper investigation into your damages or injuries
- Offers a settlement amount far less than a reasonable person would expect in the same situation
- Altering your policy without previous notice to you and then denying or reducing your claim due to the changes
- Insurer doesn’t inform you of the company’s arbitration policy in the event you disagree with the claim decision or settlement offer
- Requesting excessive documentation that your policy doesn’t indicate you would need to provide
- Using fraudulent or otherwise illegal claim investigation methods
- Using demeaning, offensive, or harassing language when speaking to you or methods to investigate your claim
- Telling you that you need to file a claim with another party and then seek reimbursement through your insurance company
- Intentionally fail to disclose benefits you’re entitled to under your policy or argue that you’re misinterpreting your policy benefits
- Not providing you or your attorney with a claims manual when requested
These represent just several of the actions an insurance adjuster could take that could make you question whether he or she is acting in your best interests. When in doubt, you can check with the Alabama Department of Insurance or seek legal assistance through Chip Nix, Attorney at Law.
How to Respond When You Think Your Insurance Company is Acting in Bad Faith
If something doesn’t feel right to you, don’t be afraid to speak up and let the insurance adjuster know. In fact, you should use the term “bad faith” to get his or her attention. If the agent disregards your concerns, the next step is to put them in writing. The letter should state your objection, why it seems wrong from your perspective, and a request for the agent to clarify why he or she has taken the action that you dispute. You can once again state that you feel you’re dealing with a case of bad faith and provide a deadline for the insurance adjuster to respond to your concerns. Consider ending your letter with your intended next steps if you don’t receive a satisfactory response to your inquiry.
Types of Damages You May Be Able to Recover in a Bad Faith Claim
If you get no response to your verbal or written inquiries or the agent continues with unprofessional behavior, you’re within your rights to file a lawsuit for compensation. Assuming you can prove a case of bad faith, you would be eligible to receive the funds the insurance company should have paid out on your claim in the first place. Consequential damages are another area of potential compensation in bad faith cases. This includes damages that occurred as a predictable consequence of the insurance company denying your claim. Possible examples include the cost to defend an injury lawsuit by another party, including amount of the judgment and attorneys’ fees.
You could also receive an award for emotional distress. Obviously, having to defend and pay for a lawsuit that your insurer should have covered would be an emotionally upsetting experience. A jury may include compensation for emotional distress if you can prove that the insurance company should have never put you in this position and that it caused you a great deal of stress.
Finally, a judge may impose punitive damages on the insurance company if it obviously acted in an intentionally reckless manner to cause you financial and emotional harm. However, the insurance company acting in a sloppy or opportunistic manner isn’t likely enough to get punitive damages added to your settlement award. It would require proof of egregious behavior on the insurer’s part for a judge to even consider it.
Attorney Chip Nix is on Your Side
Mr. Nix understands that fighting an insurance company can feel extremely intimidating. After all, you’re only one person and the insurance company has multiple employees and many financial resources. If you feel that you have received an unfair denial of your claim or an offer that seems unreasonably low, contact Chip Nix, Attorney at Law at 334-279-7770 to request your free case review. Mr. Nix’s legal office is in Montgomery, Alabama. He serves people in that city as well as all surrounding communities.
Chip Nix has over four decades of experience as an attorney. He isn’t afraid to take on large insurance companies to get them to do the right thing on behalf of the people they insure. He attempts to settle cases out of court whenever possible, but also has the courtroom experience to argue for your right to fair treatment and compensation in front of a judge and jury.