Dealing with property damage is stressful and frustrating—especially if the damage is to your home. You have insurance coverage to help you cover these damages. When you file a property insurance claim, you have the fair and reasonable expectation that you will receive your benefits in a timely manner. Unfortunately, that does not always happen. Claims can be denied for many reasons.
Insurance companies have a responsibility to use good faith in settlement negotiations. However, bad faith insurance practices remain a serious problem. You have the right to hold an insurance company that acts in bad faith accountable. In this article, our New Orleans bad faith insurance attorney provides an overview of the damages that can be awarded in a bad faith claim.
What are Bad Faith Damages?
The American Bar Association (ABA) explains that insurance companies owe policyholders a basic duty of good faith under the terms of their contract. If an insurance company acts in bad faith—such as denying a property insurance claim without any justification—the policyholder has the right to seek compensation, including bad faith damages. Indeed, bad faith damages arise when an insurance company fails to act in good faith towards its policyholder.
Insurance claims are generally regulated at the state level. As such, bad faith claims generally also arise under state law. For example, in Louisiana, La. Rev. Stat. § 22:1892 regulates an insurer’s duty to use good faith settlement practices.
Bad Faith Homeowners Insurance Claims: An Overview of Damages
What are the damages that homeowners in New Orleans and elsewhere in the region can seek in a bad faith claim? The specific answer will depend, in part, on the facts of the case. With that being said, the following are all potential categories of bad faith damages that can be claimed by homeowners:
- Compensatory Damages: Bad faith claims start with compensatory damages. These are intended to reimburse the policyholder for direct losses and costs incurred due to the insurer’s bad faith actions. Specific examples include unpaid benefits owed under the policy—as well as additional expenses such as temporary housing if a claim related to home damage was unreasonably denied. A key point to know is that you can pursue the full value of your initial claim as part of your bad faith insurance claim.
- Consequential Damages: Consequential damages are a category of damages that are designed to cover losses that occur as a consequence of the insurer’s failure to act in good faith. For example, if a delayed payment leads to further damage to a property—such as mold growth after a water damage claim is unreasonably delayed post-water damage—the policyholder can claim these additional costs as well.
- Emotional Distress: In some cases, when an insurer acts in bad faith, the stress and anxiety caused can be compensable. These damages are awarded for the mental suffering policyholders endure due to the insurer’s misconduct—especially when the home is uninhabitable or family heirlooms are destroyed. It is a category of damages that should always be considered as part of a bad faith insurance claim.
- Legal Costs: Bad faith claims are complicated. You do not want to take on the process alone. A top-tier property casualty attorney can make the difference. Notably, you can pursue the full cost of your legal expenses—including attorneys’ fees—through your bad faith claim. Indeed, in many bad faith cases, courts allow policyholders to recover the costs of legal representation.
- Punitive Damages: While not granted in every case, punitive damages are often an issue in bad faith claims. They are awarded to punish any particularly egregious behavior on the part of the insurance company in order to deter similar conduct in the future. To be clear, punitive damages are not tied directly to the loss suffered but are instead intended to penalize the insurer. Still, they are awarded to the claimant.
Three Tips for Bad Faith Insurance Claims
Bad faith insurance claims can be challenging legal cases. If you suspect that you have been mistreated by an insurance company and that you may have a bad faith claim, it is imperative that you take a proactive approach to protect your rights and to put yourself in the best position to get the maximum available compensation. Here are three actionable tips for bad faith insurance cases:
- Document Everything (Very Important): Documentation is key to bringing a successful property insurance claim—and that is especially true for policyholders who are seeking bad faith insurance damages. From the very beginning of your claim process, keep detailed records of all communications with your insurance company. Along with other things, you should save copies of emails and letters and take detailed notes of phone conversations. It is best to document timelines, names of the insurance agents you spoke with, and their responses. The more evidence you have of bad faith, the better your chances of getting damages.
- Carefully Review Your Policy: Proving bad faith by the insurance company requires establishing that they violated your rights under the terms of your policy and/or violated the law. You should carefully and thoroughly review your policy. For example, imagine your homeowners’ insurance claim was denied. You believe the denial in bad faith because it is wholly unjustified. It is crucial that you point to the specific policy provisions that help to establish why coverage is warranted, given the damage to your property.
- Seek Professional Legal Representation: You do not have to go up against an insurance company alone in a bad faith case. If you are alleging bad faith, it means that you have already run into some serious issues with the insurance company. Professional guidance and support can make a difference. Remember, bad faith insurance claims can be legally complex and challenging to prove. A New Orleans property insurance lawyer who has specialized experience in bad faith cases can provide you with the expertise needed to navigate the claims process and challenge your insurer’s actions. Along with other things, your lawyer can help you understand your rights, evaluate the strength of your case, investigate the bad faith, and help you take legal action to get the maximum benefits.
Why Trust Insurance Claim HQ for a Bad Faith Insurance Claim
Property insurance claims are complicated—especially if you are trying to take on an insurance company that has used bad faith settlement practices. At Insurance Claim HQ, we are committed to helping policyholders get what they are owed, including any available bad faith damages. If you suspect that your insurance company delayed, undervalued, or denied your benefits in bad faith, we are here to invest the time and resources that your case deserves. Our record of case results demonstrates what we can do for clients in bad faith insurance claims. Bad faith insurance practices should not be allowed to stand unchallenged. Our law firm helps insured parties understand their rights and their options. We also pursue the absolute maximum bad faith insurance damages.
Schedule a Free Consultation With Our New Orleans Bad Faith Insurance Lawyer
At Insurance Claim HQ, our New Orleans bad faith insurance attorney is committed to fighting for the rights of policyholders. Do you believe that your insurance coverage was denied in bad faith by the insurance company? We are here to help you seek the maximum available benefits. Contact us today for your free, no obligation consultation. Your case is reviewed confidentially. We handle bad faith insurance claims in New Orleans and across the country.
