Insurance Bad Faith

Responsibility, Duty, Liability

  • Your insurance company has a duty to treat you fairly, and to protect you from third-party claims, because you bought the liability insurance, whether on your home or on your automobile.
  • The insurance company has to protect your interest when settling your claim
  • The insurance company must negotiate the claim rather than just protecting the company’s own interest, or they can be liable to you for not protecting your interests.

If you bought a policy that says it is a 15/30 policy, and you injured someone and the damages exceed $15,000.00, the insurance company does not have to pay more than the $15,000.00 in coverage.

If the other party is willing to settle for the $15,000.00 and liability is reasonably clear, and the damages equal or exceed $15,000.00, the insurance company has to pay the $15,000.00.

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Insurance Bad Faith Lawsuit:

  • If, AS IN THE ABOVE CIRCUMSTANCE, the insurance company does not pay the $15,000.00, then you might be able to sue your insurance company for what is called First-Party Bad Faith in an insurance bad faith lawsuit.
  • Your insurance company must treat you fairly, and must not expose you to a judgment far in excess of the amount of the coverage when the insurance company could have settled the case within the coverage limits.
  • Under these circumstances, you could sue with an insurance bad faith lawsuit for not only the amount you are personally responsible for to the third-party, but you could also sue for your emotional distress and general damages, and for punitive damages to punish the insurance company for not treating you fairly.

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