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Having a car accident is stressful enough without having to worry about whether your insurance company is acting in bad faith. Whether or not your insurance company is acting in bad faith is a factor you should consider in deciding not only whether you need to hire a lawyer, but who the best lawyer to help you with your car accident case would be.
Like many states, Alabama law applies an implied covenant of good faith and fair dealing to contracts. In short, this means that Alabama law requires insurance companies to be fair and act in good faith when fulfilling their contractual obligations towards their policyholders.
Since Alabama recognizes the personal injury tort of insurance bad faith, insurance companies that operate in bad faith open themselves up to possible civil lawsuits filed against them by their policyholders. Naturally, what follows next are two commonly asked questions, what is good faith and what does bad faith mean? Let’s take a moment to discuss both, starting with good faith.
Generally, good faith describes honest dealing. There isn’t a one-size fits all definition of good faith, but in the context of a car accident, it means that your insurance company is working with you in a fair and honest manner to reach a reasonable settlement. An insurance company that is acting in good faith after your car accident should do the following:
- Perform a thorough and adequate investigation of your claim.
- Seek out and compile all relevant documents and other evidence concerning your claim.
- Fairly and honestly evaluate the information obtained during the investigation, including all relevant documents and other evidence.
- Fairly and honestly review and interpret your car insurance policy.
- Deny or offer a settlement for your claim based on reasonable and legitimate reasons.
It’s important to know that good faith does not mean you get everything you want or think you deserve. Keep in mind that the goal of an insurance company is to pay out the least amount of money possible on a claim. That’s not necessarily bad faith. Insurance companies may take any action that is within the boundaries of the law. That includes offering you the lowest possible settlement amount if they have a reasonable and legitimate basis for the offer.
So, what about bad faith? Bad faith is engaging in untrustworthy behavior and using unfair dishonest practices in a legal contractual matter. Before concluding that your insurance company is acting in bad faith, you may want to read or re-read your car insurance policy to make sure you know what your insurance policy covers and also to double-check that you have upheld your part of the bargain.
While bad faith acts don’t all fall into a cookie cutter mold, there are a few bad faith signs you can watch out for when trying to resolve your car accident claim with your insurance company.
- Your insurance company does not investigate your claim or does not investigate your claim within a reasonable time. It shouldn’t take your insurance company three months to start investigating your claim.
- Your insurance company intentionally misrepresents your coverage and any other rights you may have under the insurance policy.
- Your insurance company intentionally misrepresents the law applicable to your claim. For example, telling you the wrong statute of limitations that applies to your claim.
- Your insurance company ignores or refuses your reasonable request for documents or withholds information that is relevant to your claim. Alternatively, your insurance company shouldn’t make unreasonable and burdensome demands for documents from you.
- Your insurance company offers an extremely low settlement in comparison to the value of your claim.
- Your insurance company does not pay your valid claim or takes an unreasonable amount of time to pay your valid claim.
- Your insurance company denies or refuses to negotiate a settlement amount for your claim within a reasonable time or without an investigation.
- Your insurance company denies or refuses to negotiate a settlement amount for your claim without a reasonable and legitimate basis or without giving you a clear and specific reason.
- Your insurance company does not communicate with you or fails to respond within a reasonable time to your attempts at communication.
- Your insurance company threatens you or engages in harassing conduct towards you.
If you’ve come across any of these bad faith red flags, you probably should contact a lawyer, sooner rather than later, to see what your options are. This is another opportunity to take advantage of the free or nominal fee consultations offered by many lawyers. If you think your insurance company is acting in bad faith and you have questions you would like answered, feel free to give me a call at 833-528-7846 or you can click the link below.