In 2019, the ten largest insurance companies in the United States collected about $330 billion in property insurance policy premiums. Given such massive revenue, there is little or no excuse for acting in bad faith and refusing to make things right for policyholders. Yet many insurance companies routinely act in bad faith. Generally, these bad faith actions involve one of the three areas discussed below.
Typically, insurance companies must cover all legal fees in a successful bad faith matter. So, a partnership with a New Orleans insurance dispute lawyer might involve no financial risk. That fact makes a big difference to many families and business-owners who are already struggling financially because of a bad faith denial.
Failure to Settle
Insurance companies have a duty to promptly acknowledge claims. That acknowledgement includes a basic assumption that the claim is at least partially valid.
Furthermore, insurance companies have a duty to promptly investigate claims. These investigations must be diligent, efficient, and transparent.
Based on the acknowledgement and investigation, the insurance company has a duty to promptly make a settlement offer. If the insured property was clearly a total loss, such as a house blown away in a hurricane, the insurance company must normally pay the full insured value within a few weeks. In other cases that involve lesser damage, the insurance company must promptly make a reasonable financial offer.
Third Party Claims
Insurance companies have a lesser duty to accident victims, mortgage companies, and other third parties affected by a property loss claim. Nevertheless, they still have some legal responsibilities.
Typically, the same general principles apply, but the time deadlines are not as strict. For example, the insurance company has a duty to investigate a third-party loss claim. But these investigations are not “on the clock.” Additionally, when presenting settlement offers, insurers frequently issue “low ball” offers.
In other words, insurance companies have some leeway regarding third-party claims, and many companies take unfair advantage of that leeway.
Failure to Defend
These claims usually involve matters which are on the periphery of an insurance policy. For example, a landlord might sue a mechanic for causing environmental damage to the property. Or, a former employee might bring an action challenging a pension or retirement plan.
Novel claims like these are expensive to defend. But insurance companies bear the entire financial risk. They cannot use claim novelty as an excuse to deny representation.
Insurance companies must act in good faith at all times. For a confidential consultation with an experienced property casualty insurance lawyer in New Orleans, contact Insurance Claim HQ. Our main office is conveniently located near Lafayette Square.