South Carolina Insurance Bad Faith Lawyer
Most individuals purchase insurance to plan for the worst-case scenarios, hoping they never face those situations. When devastation occurs, victims look to their insurers to provide desperately needed compensation during these difficult times. They expect insurance companies to fulfill signed policies with integrity and good faith.
Unfortunately, insurance companies routinely prioritize profits over honoring policy terms. From canceling insurance policies without notice to stating that individuals are ineligible to receive legitimately owed benefits, many insurers will use any means necessary to avoid paying valid claims.
If an insurance company failed to act in good faith in dealing with you in connection with your claim, you have a right to fight for accountability and the compensation you are owed – both for a denied claim as well as the separate claim of insurance bad faith. Call our South Carolina insurance bad faith lawyers today to schedule a free consultation to learn about your legal options.
Insurance Companies Are in the Business of Making Money.
Insurance companies are in the business of making money, meaning their primary objective is protecting and increasing their profits. Thus, when an individual is severely injured (or a loved one dies in a tragic accident), or when another policy claim is made, insurance companies may deny coverage, attempt to negotiate a claim for less than it is worth, or utilize other bad-faith tactics to avoid fully paying claims.
Insurance bad faith typically arises in cases involving substantial amounts at stake, such as the total loss of a home by fire with an individual, or a major claim by a company (such as a covered employment practice claim made against a company). In a typical “fender-bender” vehicle accident, they will usually pay out what they owe (or an amount that is justifiable).
The following are a few common examples of insurance bad faith:
- Unreasonably delaying claim payment, such as making a claimant comply with a seemingly never-ending list of additional information needed
- Failing to properly investigate a claim, and then claiming that the claim is not covered (when in fact it is), or disputing the number of damages claimed
- Denying a claim (or portions of a claim) for an improper reason
- Offering to settle a claim for less than the damages sustained
- Offering to settle a claim for an amount unrelated to the injuries (and not providing justification for such amount)
- Intentionally misrepresenting the terms of a policy or the policy limits or the matters covered
- Placing the blame on an individual for inadvertently causing a loss (such as in the case of a fire), when no such provision exists to deny coverage
- Making payments without specifying the coverage associated with the claim
- Canceling a policy due to an individual making a claim
- Unreasonably denying or delaying life insurance proceeds to a family that lost a loved one
Why Does Insurance Bad Faith Happen?
When an insurance company acts in bad faith, they are gambling on the fact that most individuals will not take legal action to fight back to receive the benefits to which they are rightfully entitled. As an example, an insurance company may “string along” a person whose home burned down for many months with continued requests for additional documentation concerning the home and the contents that were destroyed. They then may arbitrarily question the value of the house and contents, without having a valid basis to do so.
The final act may be to offer a “low-ball” settlement for the amount owed, basing such settlement on claiming that the homeowner was partially responsible for the cause of the fire (such as if the house had defective wiring), when, in fact, there is no such exclusion in the policy (unless the homeowner intentionally causes the fire).
By seeking to wear down policyholders and to prey upon them when they most need the insurance proceeds, the insurers are engaged in insurance bad faith. They know that (i) most people will ultimately accept the settlement offered, and (ii) the few that question their behavior may be settled prior to litigation. So, insurance companies will in the long run benefit by treating their insureds poorly in cases in which substantial proceeds are involved.
Insurance bad faith will be highly dependent upon the facts of a particular situation. At a high level, insurance companies are required to give their insured at least equal consideration as they give their own interests when reviewing any ambiguous terms of a policy. Typically, they do not do so.
At Mickelsen Dalton, we represent the victims of bad faiths on contingency, meaning we never charge a fee unless we are successful in obtaining compensation. Further, if a case proceeds to trial, we advance all litigation expenses while a matter is ongoing, and these costs are typically fully covered by a settlement, insurance proceeds, or a jury award.
What Is an Insurance Bad Faith Claim?
When an insurance company refuses to pay on a valid policy, this can be financially devastating to an individual and their family, as the denial of benefits can put a person’s (or business’) livelihood in jeopardy.
Refusal to pay can be especially devastating in the case of a life insurance policy, which may be critical to the financial wellbeing of a decedent’s survivors. When a policyholder pays monthly premiums, he or she reasonably believes that a company will pay the death benefit to beneficiaries. However, many insurance examiners interpret policies incompletely or unfairly to justify denying insurance benefits. When this occurs, it is often necessary to file a lawsuit for insurance breach of contract and bad faith. Such cases often require expert witnesses (such as independent underwriters) to explain to a judge or jury what a company did wrong in failing to pay.
An Insurance Bad Faith Claim is Separate from the Underlying Claim
When a policyholder is wrongfully denied insurance benefits, they may have two claims against an insurance company – one for the wrongly denied benefits (which is based in contract and insurance principles), and the other based upon the egregious and wrongful behavior of the insurance company.
How Much Can I Recover in an Insurance Bad Faith Case?
In an insurance bad faith case, the amount awarded by a jury will be dependent upon how outrageous the conduct was. In many instances, the award for insurance bad faith will far exceed the underlying claim.
The purpose of a bad faith claim is to make a policyholder “whole” for having to put up with the bad faith from the insurance company. In some cases of extreme bad faith, a jury may award punitive damages, which are done solely to punish the insurance company and to send a message to all insurance companies that if they do not fairly engage with a policyholder, they may be subject to a heavy financial payment.
In both an award for bad faith and punitive damages, it will ultimately be up to a jury as to what it believes to be fair. As an example, if an insurance company failed to properly pay a homeowner for a roof damaged in a storm that was covered under a homeowner’s policy by sending endless requests for more documentation, and forcing the homeowner to ultimately pay out of their own pocket for a new roof, the jury may award the homeowner significant damages for their inconvenience, plus the actual cost of the roof that should have been paid under the policy.
If they find that the course of conduct was so outrageous that punitive damages should apply, they might additionally make a punitive judgment award for many times the actual damages to punish the insurance company. In awarding punitive damages, a jury will often consider the financial position of the insurance company, as an award must be substantial in order to have a deterrence effect.
Further, the laws concerning the applicability of punitive damages and the potential amounts available will differ significantly from state to state. Once we learn about your case we can explain the laws that may be applicable.
As insurance bad faith lawyers, we take on unscrupulous insurance companies that wrongfully deny benefits.
We generally only handle complex cases that involve substantial damages, multiple expert witnesses, significant opposition, and intense negotiations and litigation.
If you are looking for bold, relentless insurance bad faith lawyers, call our office to schedule a complimentary case evaluation. We will not hesitate to take a case to trial if a fair and full settlement cannot be negotiated.
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We are not afraid to take on big insurance companies and businesses, and we have the resources necessary to develop a compelling case for maximum compensation.
Call our office to schedule a complimentary consultation. We never charge a fee unless we recover compensation on your behalf, and we advance litigation expenses while a case is ongoing.
Let us help seek to hold dishonest insurance companies financially accountable.