Auto insurance companies, like all other business, must act fairly and in good faith when dealing with their policyholders and any injured person who may qualify for coverage under their policies. If an insurance company denies coverage under a policy without a reasonable basis or contrary to the terms of the insurance policy, they may have acted in “bad faith.” This can occur when an individual is injured or suffered damage to a car in a car accident or has caused injury to another person or vehicle but is denied insurance coverage.
Proving Bad Faith
A simple mistake or error in judgment by an insurance representative in denying a claim will not constitute bad faith under the law. Generally, policyholders must demonstrate the insurance company failed to properly investigate the claim, missed obvious facts in examining the claim’s validity, or intentionally denied coverage without a reasonable basis. Another way for an insured to prove bad faith is to show the insurance company engaged in a pattern or practice of not complying with state or federal insurance regulations.
Some common examples of bad faith include:
- Providing no explanation for a claim denial
- Inadequately investigating a claim
- Misrepresenting the terms of the insurance policy (such as the policy limits or effective dates)
- Failing to give a proper defense to an insured sued after a car accident
- Failing to shield an insured from additional liability or excessive verdicts
A bad faith claim can be based on actions that occur before, during, or after the denial of coverage.
Failure to Properly Defend an Insurer
When a driver is at fault in a car accident, they expect the damage they caused to another person to be paid by their automobile insurance carrier. If the injured person sues the insured, the insurance company under the terms of the policy often will provide the insured with a defense of the lawsuit. The actions of the insurance company in defending the insured also can be the basis of a bad faith lawsuit. For example, courts have found car insurers liable for bad faith when they failed to protect their insured from potential exposure to a high verdict by failing to settle a lawsuit at an early phase in the litigation.
Compensation for Wrongfully Denied Policyholders
If an insurance company acted in bad faith in denying a car accident claim, they may be held liable for bad faith. By filing a bad faith lawsuit against the insurer, individuals entitled to coverage under the policy can receive not only the coverage owed under the insurance policy but also consequential damages, punitive damages, and the policyholder’s legal expenses. In some cases, policyholders may also receive emotional distress damages in some bad faith cases. To determine if you have a bad faith claim against an insurance company for wrongful denial of car accident coverage, consult an experienced Pittsburgh bad faith insurance lawyer who can evaluate the merits of your claim.
Pittsburgh Bad Faith Insurance Lawyers at AlpernSchubert P.C. Fight on Behalf of Policyholders
If you have been improperly denied insurance coverage for a car accident claim, you may be entitled to compensation. At AlpernSchubert P.C. our experienced Pittsburgh bad faith insurance lawyers protect the rights of insurance policyholders against bad faith by insurance companies. Our offices are conveniently located in Pittsburgh to serve clients throughout Allegheny County, Lawrence County, Washington County, and Western Pennsylvania. To schedule a free confidential consultation with an experienced Pittsburgh bad faith insurance lawyer, call us today at 412-765-1888 or 800-243-6095 or submit an online inquiry form.