Posted on March 10, 2023
ICHQ | Site Author
Insurance policies are a contract between the insurer and the policyholder. However, as with all contracts, there is the possibility of an attempted withdrawal or failure to live up to the contract.
There are tools in place to prevent or rectify this should it leave one party unfairly compensated: the Louisiana Revised Statutes imply that there is a duty of good faith and fair dealing that is inherent in every insurance contract. For any and all insurance contracts, this means that insurance companies have an obligation to deal fairly and honestly with their policyholders.
Insurance Claim HQ’s bad faith insurance attorneys can help you understand if your insurance claim is being hampered by a breach in the insurer’s duty to act in good faith. Contact us to begin a case review.
What Is Good Faith in Insurance Contracts?
Good faith in insurance contracts means that the insurance company must act in the best interest of the policyholder. This includes promptly investigating claims, providing accurate information to policyholders, and paying claims in a timely manner. Insurance companies must also communicate with policyholders in a way that is clear and easily understandable.
What Is the Covenant of Good Faith and Fair Dealing?
The covenant of good faith and fair dealing is a legal term that refers to the implied obligation that insurance companies have to act responsibly dealing with their policyholders. This means that the insurance company must not take advantage of the policyholder, withhold information, or act in any way that is contrary to the best interest of the policyholder.
What are insurers obligated to do based on this implied covenant of good faith? This means that insurers must:
- Promptly investigate claims and provide accurate information to policyholders.
- Pay claims in a timely manner.
- Communicate with policyholders in a way that is clear and easily understandable.
- Not take advantage of policyholders or act in any way that is contrary to their best interest.
- Act fairly and honestly in all dealings with policyholders.
What Happens if an Insurer Breaches the Covenant of Good Faith and Fair Dealing?
If an insurer breaches the covenant of good faith and fair dealing, a homeowner’s insurance policyholder can initiate bad faith litigation against their insurer. In such cases, the policyholder can sue the insurance company for damages that are in excess of the amount of the policy. This can include damages for emotional distress, punitive damages, and attorney’s fees.
Contact Us If Your Insurer Has Breached Its Contract
If you believe that your insurance company has acted contrary to the covenant of good faith and fair dealing, contact Insurance Claim HQ today. Our insurance bad faith attorneys can help you navigate the legal system and fight for your rights as a policyholder. They can also help you recover damages for your losses. Get the compensation you deserve and don’t let the insurance company take advantage of you: call us today for a free consultation.
