When fighting an insurance company’s bad faith actions, it is important to understand the many various defenses the insurer may assert against you.
Know Your Policy
Of course you know that you must pay your premiums in a timely fashion to keep your coverage current. But there are also many other duties imposed on you by the typical insurance contract, many of which you may not be aware of because they do not arise very often. Yet if you did not comply with these terms, the insurance company may claim that you are in breach of contract, and the insurer does not have any duty to cover your claim.
If you have a claim, your policy likely requires that you notify your insurer in a timely manner. This timeframe may be very brief, so it is important that you act promptly. Sometimes when an accident happens, you may not initially know whether to contact your insurer or not. You may want to check your policy at that time to make sure you do not file the claim too late. The duty to notify the company about a claim also applies if you are presented with a claim or lawsuit by a third party, such as in an automobile accident where the other driver claims that you are at fault.
Another common requirement is that you provide a statement of proof of loss in a timely manner. Consult your policy to see what type of statement or evidence is required to initially substantiate your claim. Failing to submit proof of loss could be damaging to your claim.
Finally, you may be surprised to learn that your policy limits the time you have to file a lawsuit if you believe the insurer has breached its duty under the contract. Remember that insurance policies are drawn up by the insurance company; they contain a great deal of fine print, all of which is geared toward protecting their interests, not yours. You can shop around for the best premium and coverage protection, but rarely do you get to negotiate all the terms of the contract. The policy is generally presented in a take-it-or-leave-it fashion, and you may or may not be aware of all the terms it contains.
Other Defenses
If the insurance company relied on the advice of its own lawyers in taking the actions it did, the carrier may have a valid defense that it acted in good faith. By the same token, however, if the insurance company ignored the advice of its lawyers, this may be evidence of bad faith that you can use against them. Lastly, there are many areas in which federal law controls, which may prevent you from pursuing a bad faith claim against your insurer. Examples include flood claims, Medicare benefits, and employee benefit plans. Whether or not you could initiate a bad faith action in these instances is a complex matter that should be investigated by your attorney.
Attorney Leandros Vrionedes handles personal injury cases in New York City and beyond and regularly deals with insurance companies in negotiations and litigation. He knows how to argue a case of insurance bad faith and respond to insurance company defenses. If you are being treated unfairly by your insurance company, contact Leandros A. Vrionedes, P.C. for a free consultation.
