New Orleans Bad Faith Insurance Attorneys
The Law Is On Your Side, and So Are We
Like any other business, insurance companies want to protect their profits. There’s no problem with this desire – until it starts to interfere with insurers’ service towards policyholders. When insurance companies collect premiums but use unsavory tactics to avoid paying out valid claims, they are acting in bad faith. This practice is illegal and can be grounds for a bad faith insurance lawsuit.
What Is Insurance Bad Faith?
Any time two or more individuals or entities sign a contract, all parties are agreeing to treat each other honestly, fairly, and in good faith. This is called the implied covenant of good faith and fair dealing, and violating it constitutes bad faith.
Some ways that insurance companies act in bad faith include:
- Misrepresenting insurance policies
- Intentionally misinterpreting language within policies
- Failing to acknowledge a claim
- Declining to conduct a thorough investigation
- Causing unnecessary delays
- Making arbitrary demands regarding proof of loss
- Refusing to approve or deny claims within a reasonable period
- Denying a claim without reason or explanation
- Undervaluing a claim without explaining why
- Using manipulation, bullying, and other abusive tactics
Most bad faith claims are filed under common law, so plaintiffs must prove that their policy benefits were withheld and that they were withheld without a valid reason. Some states, like Louisiana, have special statutes to protect policyholders for insurance bad faith. Due to Hurricane Katrina, for example, Louisiana’s bad faith statutes were amended to include stiffer penalties and sanctions against insurance carriers who mistreat their customers.
Under Louisiana’s bad faith statutes, your insurance company should be responsible for all attorneys’ fees.
Our New Orleans bad faith lawyers understand all common laws and state statutes and can help you recover the benefits you are entitled to.
First-Party vs. Third-Party Claims
In terms of natural disasters like Katrina, most instances of insurance bad faith come from first-party insurance claims. In these situations, a policyholder makes a claim with their insurance company and faces many of the behaviors outlined in the previous section. If your home was damaged in a storm, for instance, and your insurance company refuses to pay for the repairs you need, you are probably looking at bad faith in a first-party claim.
On the other hand, third-party claims arise from misbehavior in liability insurance. If you cause an accident and have liability insurance, your insurer should pay out the affected party to protect you from a lawsuit. The best example of this comes from car accidents. If you ran a red light and caused an accident, the other driver might make a claim against your insurance policy for the damage to their car and/or any injuries they sustained. If your insurance company refuses to pay this claim or does not account for the other driver’s injury and losses as your policy allows, and you face financial losses from any resulting litigation, you may be able to sue your insurer.
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