A car accident is one of the most stressful events anyone is likely to face. As though getting hurt in the crash isn’t bad enough, your insurance company may treat you as if you are at fault for the accident – even if you are not the one responsible.
All insurance companies have one objective with car accident claims: to minimize the amount of money they pay. You might dutifully pay your premiums for years, but when the time comes that you need those benefits, the adjuster may act like you’ve done something wrong.
Sadly, resistance on the part of the insurance company after an accident is to be expected. In fact, finding ways to minimize payouts is business as usual for the average insurance adjuster.
However, some insurance companies go above and beyond to mistreat policyholders with valid claims. If this is the situation in which you find yourself, you may have a case for insurance bad faith.
What Is Insurance Bad Faith?
The situation above is frustrating, to be sure, but it doesn’t automatically qualify as bad faith. Insurance companies are, after all, entitled to investigate claims to ensure they are legitimate before offering payment. Even an offer that is lower than what you expect isn’t necessarily bad faith.
Legally, bad faith occurs when an insurance company violates the duties it has to its policyholders. Examples of insurance bad faith include:
- Misrepresenting the coverage provided by an insurance policy
- Unreasonable delay or failure to investigate and respond to claims
- Offering to settle claims for significantly less than the actual value (“lowballing”)
- Delaying notification that a claim is covered or denied
- Tampering with claim applications as a pretext for lowball settlement offers
- Failure to explain why a claim was denied
- Requiring policyholders to receive repairs on their vehicle from a particular business
The website for the Nebraska Legislature includes a full list of acts and practices that constitute bad faith insurance. Generally, however, bad faith is difficult to spot and even more difficult to prove. That is why speaking to an experienced attorney is the best way to protect yourself from an insurance company engaged in misconduct.
Do I Have a Bad Faith Case?
When you meet with our team at Hauptman, O’Brien, Wolf & Lathrop, P.C., we will fully review your insurance policy and interactions you have had with adjusters and other employees of the company in the wake of the accident. As you assemble documents to bring to your free consultation, pay particularly close attention to the declarations (or “dec”) page of your policy.
The dec page should be relatively straightforward, and it should clearly specify crucial details such as:
- The name of the policyholder
- The names of any and all people insured by the policy (insureds)
- The policy number
- The types and amount of coverage available under the policy
- Effective date and end date of the policy
- Premium amount
- Contact information to report a claim
In order to prove bad faith, you and your lawyer must present evidence that the insurance company violated the terms of its duty to you, the policyholder. The dec page and insurance policy as a whole help establish the nature of this duty, including what you are covered for, for what amount, and for how long (to name a few components).
Along with the policy itself, we will evaluate communications you have had with the insurance company in the wake of the crash. These may include the original claim paperwork you filed and any letters you received pertaining to your claim. In addition to examining your accident for unfair insurance practices, we can also identify possible opportunities and threats you may face in your lawsuit against the careless driver who caused the collision.
Example: Getting Hit by an Uninsured Driver
We’ve written before about the minimum insurance coverage amounts that drivers in Nebraska are required to carry. One of the requirements is coverage for bodily injury of $25,000 per person and $50,000 per accident in cases where the at-fault driver is uninsured.
If the driver who caused the accident has no insurance, your uninsured motorist bodily injury policy should cover at least some of the costs you face after the accident. Say, for instance, that the cost of your bodily injuries is $20,000 and your vehicle sustained $30,000 in damage. Based on the totals above, this falls well within the minimum amounts required by Nebraska law.
So, if the insurance company delays or denies your claim or tries to settle your claim for less than what it is worth, you may have a viable bad faith claim. However, when you’re injured and stressed after an accident with an uninsured driver, it is easy to overlook the misconduct of the insurance company.
Is a Bad Faith Insurance Claim the Same as My Car Accident Case?
Although the crash may be the reason you are embroiled in a dispute with your insurance company, filing a bad faith insurance claim is different and separate from the case you may be pursuing against the careless driver.
A car accident claim falls under the banner of personal injury law. As such, you and your lawyer are:
- Pursuing compensation for the damages you suffered as a result of the accident, such as medical expenses, lost income, repair or replacement of your vehicle, etc.
- In most cases, negotiating or filing a claim with the other driver’s insurance company (although your insurance company may be involved if the other insurer disputes fault or the responsible driver has no coverage or insufficient coverage for your damages)
- Suing the driver who is at fault for the accident
Insurance bad faith cases are different in several key respects from accident injury claims:
1. You Are Taking Action Against Your Own Insurance Company
As a customer who pays insurance premiums, you have a right to expect that the insurance company will uphold the duties specified in the policy. If you are filing a claim after an accident, signs that the insurance company may not be doing its duty include:
- Taking an unreasonable amount of time to respond to your claim
- Delaying investigation of the accident
- Providing you a very low settlement offer based on your coverage and accident-related losses you have accrued
- Delaying payment of your claim
- Denying the claim without satisfactory explanation
Filing an insurance claim after an accident is complicated enough. Now imagine having to take your car insurer to court. This is daunting for any layperson and even some attorneys, but the lawyers at Hauptman, O’Brien, Wolf & Lathrop, P.C. have extensive experience with bad faith cases involving long-term disability insurance and other claims.
2. You Are Pursuing Different Damages
The compensation in an accident injury lawsuit is intended to “make you whole” for the damages you have suffered. These may include economic damages for losses with a definitive dollar value, such as your medical bills, as well as non-economic damages, such as pain and suffering.
In bad faith claims, the damages are slightly different. A successful recovery may entail:
- Economic damages, such as the medical expenses or car repair bills you had to pay out of pocket because the insurance company unjustly denied, delayed, or underpaid your claim.
- Non-economic damages stemming from the mental and emotional hardships of mistreatment by the insurance company
- If you were unable to pay medical bills as a result of the prolonged insurance process or denial of your claim, you may be entitled to damages for harm to your credit.
Although fraud and other misconduct by an insurance company might seem like sufficient grounds for punitive damages, these will not be available in your case. Nebraska is one of the few states that does not permit the recovery of punitive damages, or damages awarded to make an example of the defendant rather than compensate the plaintiff for losses he or she has sustained.
3. The Insurance Company May Also Face Legislative Action
In addition to your bad faith claim, misconduct by an insurer may be subject to investigation by the Nebraska Department of Insurance. The director of the department is empowered to investigate violations of the state’s Unfair Insurance Trade Practices Act. Companies that violate the act may be subject to monetary penalties and suspension or revocation of their license or certificate to issue insurance.
These penalties are separate from the civil claim you bring against the insurer for bad faith dealing. However, your legal claim for bad faith violations combined with the scrutiny and financial and licensing penalties from the state may prevent the company from mistreating other policyholders and claimants in the future.
Contact Our Lawyers About Insurance Bad Faith Claims in Omaha Today
After a car accident, it is in the best interest of all victims to speak to a lawyer as soon as possible. Even if the insurance company is dealing with you fairly, you run the risk of saying or doing the wrong thing, which in turn can jeopardize the integrity of your claim.
Unfortunately, even if you do everything right, an insurance company dealing in bad faith may deny your claim, offer you much less than you deserve, or interminably drag out the investigation process. All of these bad faith actions can increase your costs and jeopardize your financial health.
If you suspect the insurance company is engaging in bad faith, contact Hauptman, O’Brien, Wolf & Lathrop, P.C. at (402) 241-5020 for a free consultation. Our attorneys serve clients in Omaha, Sarpy County, and nearby areas of Nebraska.