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What to Do About a Bad Faith Insurance Claim as a Motorcyclist: A Step-By-Step Guide
Have you ever gotten a lot less help than you expected from an insurance company? Sometimes, this is a misunderstanding of the actual coverage, but often it is the result of an insurance company acting in bad faith. While mistakes do often happen in the world of motorcycle insurance, a bad faith claim is by-and-large the result of negligent behaviors on the part of big companies. Today, we're going to cover what "bad faith" means legally as well as how to fight this type of claim.
What is a bad faith insurance claim?
When an insurer attempts to renege on the obligations it has to its clients, that's bad faith insurance. Usually, this results in not paying out on a legitimate claim, but it can also involve extreme waiting periods of not investigating a claim. A lawyer isn't always involved but is often needed for more aggressive insurance companies that actively misrepresent their contract.
It's important to note that simple mistakes are typically not bad faith; this part of the law is meant to protect consumers from active tactics insurance companies take to avoid contractual obligations.
Each state has its own laws around bad faith insurance. An attorney will know about the specific laws in your state and whether or not the claim is valid.
What are some examples of a bad faith claim?
- This type of claim may apply to the following conditions:
- A misrepresentation of the contract's terms
- An unreasonable amount of time to pay the claim
- Denied claims without a satisfactory reason
- An undervalued or denied claim after failure to investigate the damage
- Failure to acknowledge a claim or act promptly
- Failure to implement reasonable standards for investigating claims
- Withheld benefits due under the policy
Of course, these lawsuits can become complicated. One relatively famous example happened right in Georgia in Kemper v. Equity Insurance Company, in which a drunk driver struck a motorcyclist and the insurance insisted that the motorcyclist needed to put $25,000 in escrow. Essentially, the district judge ruled that the insurance company didn't do anything wrong, as they had an obligation under the law to check for hospital liens and protect against hospital lawsuits, which was the point of that $25,000 sum. That lawsuit's bad faith settlement amounts would have been upwards of $10 million.
As another example, State Farm Mutual Automobile Insurance Company v. Campbell, went all the way up to Supreme Court in 2003 and solidified the rules on just how much in punitive damages an insurance company should expect to pay out.
What does typical motorcycle insurance coverage actually cover?
Most times, your average insurance company will cover collision, comprehensive, medical payments and personal injury protection. Other companies have more bells and whistles to their policies, including roadside assistance, coverage for any trailers hitched to the bike and other custom coverage features. You'll definitely need to look at your own plan in detail.
Can I dispute an insurance claim?
Yes, you definitely can, often by starting with the company itself. First, you should review your original claim, check it for discrepancies (such as property values) and collect stronger evidence, such as receipts and hospital bills. You'll want to contact the company, explain these mistakes and ask if someone could re-evaluate the claim. Often, this will resolve the situation, but if it doesn't, it may be time to connect with a professional. Don't say yes to a settlement offer until you've talked to a specialized bad faith insurance lawyer.
How can I fight a bad faith insurance claim?
With the help of a lawyer who's familiar with your specific state's local unfair claim practices law, you can pursue damages and in some extreme cases even punitive damages. They will be able to tell you much more about the details of your case. Most states have at least some version of the Unfair Claims Settlement Practices Act as modeled by the National Association of Insurance Commissioners (NAIC), with the exception of Alabama, Oklahoma and the US Virgin Islands, which do not use that model. Though almost all of the states feature very similar versions of that model, it's important to find a local expert. Go to an Atlanta bad faith insurance lawyer, for instance, if you have had an accident in the city.
If you or a loved one has been impacted by a motorcycle accident, shorted on their insurance and want to make a bad faith claim against the insurance company in Georgia, Tennessee or South Carolina, give us a call first!