What Are Average Bad Faith Insurance Settlement Amounts?

Posted on July 13, 2022

Hayden Haskins | author

ICHQ | Site Author

You should be able to trust your own insurance company—after all, you’re their paying customer. The unfortunate reality, however, is that your insurance is not always on your side.

When your insurance company stalls, misleads, or denies your claim, they are acting in bad faith, and you deserve justice. But what does that mean for you when it comes to compensation?

A bad faith insurance attorney, like the ones at Insurance Claim HQ, can help you to calculate the value of your bad faith claim. We will work with you to prove that your insurance company is acting in bad faith by gathering evidence, analyzing your claim, and filing a bad faith insurance lawsuit against your insurance company on your behalf.

In this article, we will cover the basics of bad faith claims, what might affect your claim’s value, and how we determine your claim’s value.

What is a Bad Faith Claim?

When you sign up for an insurance policy, you expect your insurance company to uphold its duty of good faith and fair dealing when you make a claim. But it is important to remember that insurance companies are still businesses and will always prioritize their bottom line over your wellbeing.

Bad faith insurance claims are when your insurance company purposefully and knowingly delays or avoids paying you when you have a legitimate claim. Though this is clearly unethical (and a breach of contract), your insurance company likely does this often without you even knowing.

If you or a loved one have dealt with any of the following actions from your insurer when pursuing your insurance claim, you may be a victim of insurance bad faith:

Refusing to pay a valid claim
Undervaluing a claim or offering an unreasonable settlement
Denying facts even when provided with evidence
Taking too long or delaying claim decisions
Ignoring your communications
Trying to intimidate you
Creating unnecessary work to deter you from filing
Lying about your coverage or twisting the facts

You should not have to pay for your insurance company’s misconduct when they act in bad faith. If you believe your insurance company’s settlement offer is too low, or that they have deceived you, call an experienced bad faith attorney and get the justice you deserve.

Common Factors That Can Impact Your Bad Faith Settlement

Although every bad faith settlement is different, there are a few common factors that may influence the value of your case. These factors are typically centered around the amount of hardship your insurance company has caused you. They can be difficult to calculate and should be assessed by an experienced attorney.

When estimating the value of your bad faith settlement, your attorney will consider:

Lack of investigation: A common reason why bad faith claims will increase in value is due to a lack of investigation or effort on the part of your insurance. If your insurance didn’t do their due diligence and still denied your claim, that will directly impact your settlement amount.
Wrongful denial reasons: Having your claim wrongfully denied is always considered bad faith. However, the reasoning behind it may cause your insurance to pay up even further. If it’s a stretch or considered wildly unjust in court, it will increase your claim’s value.
How undervalued your claim is: If your insurance company makes you an insultingly low offer compared to what you are entitled to, this could come back to bite them. The more undervalued your claim is, the higher the likelihood of you having a high-value bad faith claim.

If you have faced an insurance claim and come back with these injustices, you may have a bad faith insurance claim and are entitled to compensation for your hardships.

Punitive Damages: When and How Much

If the insurance company’s actions are extremely egregious or negligent, punitive damages may also be awarded. These damages are meant to make an example of flagrant wrongdoing and provide additional compensation to victims for their hardships. Although punitive damages are allowed in bad faith cases in Louisiana, they are not always guaranteed.

However, when there is an extreme case, punitive damages can be serious. Punitive damages in bad faith insurance claims tend to be large, as insurance companies have deep pockets. Consider the case of State Farm vs Campbell, where the victim was ultimately awarded $9 million (after an initial award of $145 million was reduced) when his insurance abandoned him during a car accident case.

Your attorney will be able to help you understand if you are entitled to punitive damages or not and can help you build the best case possible.

How to Determine Your Settlement Value

When you file and win a bad faith settlement claim, your original insurance policy coverage isn’t where compensation stops. Bad faith claims will factor in economic damages, non-economic damages, and sometimes punitive damages to provide adequate compensation for the hardship your insurance company put you through.

Economic damages are costs that are easier to measure, and might include things like:

Medical bills
Repair costs
Costs of relocation
Loss of property
Contractor work
Replacement costs
Lost wages
Lost earning potential

Be sure to keep your receipts and track any costs that pile up during and after a property value claim, as well as during your bad faith claim. Keeping bills and communication will be important evidence when it comes time to file.

Non-economic damages are harder to calculate since they don’t have an actual cash value. Some examples of non-economic damages that could potentially apply (depending on your circumstances) include:

Pain and suffering
Mental anguish
Loss of quality of life
Loss of companionship
Loss of reputation
Emotional distress
Physical impairment

The cost of these takes an experienced attorney to accurately calculate. This makes hiring an attorney early on even more important to ensure you’re getting the full compensation you deserve.

How a Bad Faith Insurance Lawyer Can Protect Your Claim’s Value

Facing a massive insurance company can be a daunting task, but you don’t have to do it alone. A bad faith insurance lawyer can help you by gathering and analyzing evidence, assessing your claim’s value, communicating with the insurance company on your behalf, and even fighting for you in court to get you the justice you need. An attorney can help you avoid any potential pitfalls and heartbreak, so be sure to call one as soon as you believe you may be eligible to file an insurance bad faith lawsuit.

Insurance Claim HQ: Fighting Against Insurance Company Bad Faith in Louisiana

The bad faith insurance lawyers at Insurance Claim HQ are here to help you fight back against injustice. Our team of attorneys have experience fighting against insurance companies who act in bad faith and are ready to work for you.

We are here to build an attorney-client relationship built on trust that puts your needs first. From evaluating your claim to filing bad faith insurance lawsuits, let our team help you get the justice you deserve.

If you or a loved one believe your insurance company is acting in bad faith, call Insurance Claim HQ at 844-964-0778 or contact us online today to schedule your free consultation.

References

State Farm Mut. Automobile Ins. Co. v. Campbell, 538 US 408 (Supreme Court 2003) https://scholar.google.com/scholar_case?case=16237518376692401359&q=State+Farm+Mutual+Automobile+Insurance+Co.+v.+Campbell&hl=en&as_sdt=6,33

The content provided here is for informational purposes only and should not be construed as legal advice on any subject.