When you purchase an insurance policy you expect that your insurance company will treat you fairly should you ever need to file a claim. Unfortunately, the harsh reality is that insurance companies often refuse to play by the rules when it comes time to pay out to an insured. In most jurisdictions, insurance companies owe a duty of good faith and fair dealing to their insureds. When a company fails to abide by the law and act in good faith, the insured may be able to pursue a “bad faith” cause of action against the insurance company with the help of an experienced Chicago bad faith insurance lawyer.
Bad Faith Claims Are Causes of Action Filed Under State Law
It is important to understand that “bad faith” is a state law cause of action which means that your right to file a bad faith lawsuit will depend upon where you live and where the insurance policy was issued – some states do not recognize bad faith claims. In those states that do provide for a bad faith claim, the laws of the individual state will prescribe what constitutes bad faith on the part of the insurance company. Below are a few of the most common activities that states have determined can amount to bad faith:
- Failure to provide proper cause when denying a claim
- Refusal to pay a valid claim
- Undue delay in deciding on a claim
- Undue delay in paying a claim
- Offer to pay less money than a claim is worth
- Misrepresentation of policy language
- Failure to properly investigate a potential claim
- Failure to respond to a request for relevant documents and information
In addition to the fact that bad faith causes of action are specific to each state, it is important to recognize that the federal Employee Retirement Security Act (“ERISA”) preempts all state law bad faith causes of action. This means that if the insurance coverage in question is an employer-based benefit rather than an individually purchased policy, you will not be able to pursue a state bad faith claim.
Bad faith claims are unique in that they provide the only opportunity to pursue damages beyond the benefits you are owed under the insurance policy. If successful, you may be awarded punitive damages to be paid by the insurance company as well as attorney’s fees. It is important to understand, however, that to prevail in a bad faith cause of action, you must prove more than the fact that the insurance company withheld benefits due under your policy – you must show that insurance company operated in bad faith.
Contact a Lawyer at Bryant Legal Group PC
If you think that your insurance company is not acting in good faith, you should speak with a bad faith insurance attorney as soon as possible. When you work with the legal team at Bryant Legal Group PC, we will carefully review your situation to identify all courses of action that may be available to you. Our attorneys will also evaluate all potential venues in which your case may be brought to identify the venue that is likely to give best consideration of your claim. Contact our Chicago law office today at 312-561-3010 or email us at firstname.lastname@example.org so that we can help you develop a strategy to recover the payments you are rightfully owed.