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What are the Types of Compensation Recovered in a Bad Faith Claim?

On Behalf of | Feb 17, 2020 | Firm News

If a flood or fire damaged your home, first you must contend with the physical damage to your property. You must also salvage your belongings, prevent further damage, find another place to live, and pay for the repairs that could take weeks or months to complete. Anyone who has experienced this type of catastrophe knows how traumatic it can be.

To resolve these unexpected and unwelcome events quickly and efficiently, many purchase home insurance and trust the insurance provider to hold up their end of the contract by paying for property damage as detailed in their policy. Yet, countless consumers are surprised to have their claim denied. Anyone in this position may want to consider bringing a bad faith claim against their insurance company to compensate for the damage to their home and the emotional stress and inconvenience caused by a denied claim.

Compensation in Bad Faith Claims

Bad faith claims allow the plaintiff to recover different types of damages:

  • Direct damages: This is compensation for property damage the insurance company was supposed to cover based on the terms of the homeowner’s policy. These are damages immediately resulting from the event that damaged the home or other type of property.
  • Consequential damages: Also known as special damages, these are not damages covered under the original insurance policy, but those caused by their breach of contract. Most relationships secured with contracts are subject to consequential damages when one party fails to uphold their obligations.
  • Punitive damages: This is compensation for the suffering you experience as a result of the insurer’s bad faith, such as emotional stress and lost income. Punitive damages are designed to punish the insurance company and encourage ethical business practices going forward.

It should be noted that while we are exploring damages related to homeowner’s insurance, bad faith breaches can occur with nearly any type of insurance policy.

Preparing for a Successful Bad Faith Claim

To assist your bad faith lawyer in preparing your claim, make sure you keep all of the documentation related to your insurance policy. If you have been unable to work because of the stress of your situation, make sure to document that with your employer as well. All these details are essential to prove your insurance company breached their obligation to you.

Pittsburgh Bad Faith Insurance Lawyers at AlpernSchubert P.C. Fight for the Rights of Consumers Impacted by Contract Breaches

It is unfortunate when an individual or company breaches an agreement to provide a business or service, but help is available. The Pittsburgh bad faith insurance lawyers at AlpernSchubert P.C. tackle complex claims for clients who were impacted by an entity who failed to meet their contractual obligations. To discuss your situation and learn more about your legal options, call 412-765-1888 or contact us online to schedule a free consultation. Located in Pittsburgh, we represent clients throughout western Pennsylvania, including Allegheny County, Lawrence County, and Washington County.