If you file an insurance claim in Washington, you have a right to expect that the insurer will process the claim in a timely manner and pay out damages according to the terms expressed in the policy. Sadly, however, that is not always what happens. We at Lepley Law Firm have seen insurance companies unfairly deny claims or unreasonably delay processing or payment of the claim. When insurers behaves in this way, they have acted in bad faith, and you have the right to seek compensation beyond the initial claim.
According to FindLaw, insurance companies owe a number of duties to their policyholders and may face bad faith litigation if they fail to fulfill any of them.
Defense
If someone files a claim against you, your insurer has a duty to defend you. This is true even if most of the lawsuit is not covered by the policy.
Indemnification
Regardless of whether the claim goes to trial or reaches a settlement, your insurer has the duty to pay out, up to the limit of your coverage, any amount entered against you. If they do not, they have failed in their duty of indemnification.
Investigation
Not only must an insurer thoroughly investigate a claim against you, but they must also provide a valuation of their findings in a timely matter. An unreasonable delay of the investigation, or a failure to investigate altogether, may represent bad faith.
Insurance companies hold a great deal of authority when it comes to handling claims, but that does not give them the right to abuse their power by failing to meet their duties. More information about insurance bad faith is available on our website.