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Understanding insurance bad faith

On Behalf of | Nov 12, 2018 | Insurance Law |

If you are like most people in Washington, you probably have an auto insurance policy to cover your loses in the event you suffer injuries as a result of an accident. You likely also faithfully pay your premiums on time. You therefore expect your insurance company to pay any claim you make and to defend you if someone sues you after a car crash. The last thing you expect is to have to fight with it to get the coverage you paid for.

Unfortunately, however, your insurance company may not always live up to your expectations. If it doesn’t sufficiently pay your claim or sufficiently represent you in a lawsuit, it may be guilty of bad faith and you may have a claim against it.

Duty to policyholders

As FindLaw explains, your insurance company owes you a number of duties as its policyholder, including the following:

  • Duty to investigate your accident
  • Duty to defend you if someone sues you
  • Duty to fairly settle with you and/or the person who sues you
  • Duty to indemnify you, i.e., to compensate you for your losses

Bad faith proof and damages

If your insurance company fails to perform any of these duties, you may be able to file a lawsuit against it and collect damages. To win your suit, you will need to prove that the company and its agents deliberately did something against your interests, such as unreasonably delaying or denying your claim.

If you prevail in your bad faith claim, the jury could award you up to three times the amount of your loss, as well as your attorney’s fees and other costs. For more information, please visit this page of our website.