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How to Handle a Bad Faith Insurance Claim

Insurance is intended for the protection of policyholders who find themselves in a relatively expensive accident. Expenses could include injuries or car damages to one or both parties. If you are rear-ended, for example, your car will be damaged and you could get injured. The insurance company of the responsible party must provide financial compensation for the treatment of your injuries, as well as for the repairs to your vehicle.

However, the issue of which expenses are covered or not covered depends on your policy and what happened during the accident. If you are found partly at fault or responsible, the other party’s insurance provider may deny payment for your damages and/or injuries.

Whereas a contract obliges insurance providers to pay insurance holders for accident damages that suit the contract’s terms, there are companies that violate their own contract requirements by withholding all or part of the due payments. In a scenario like this, a policyholder will often be unsure about the steps to be taken next, considering that insurers typically have a strong bargaining position because of their size and the intricacies of their rules.

You have a bad faith insurance claim when the insurer:
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> becomes unreasonable in interpreting the terms in the contract;
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> withholds payments on purpose;

> doesn’t want to settle a case;

> refuses to reimburse the entire amount of expenses of the insurance holder; and

> leaves the claim unprocessed.

If your insurer has failed to reimburse your damages, there are plenty of options that you can consider. First and foremost, you can file an appeal. Most firms only offer a restricted time for this, so make sure that you know all the important deadlines. Second, you need to prove that the company paid no attention to your rights by rejecting your claims for reasons not warranted by your policy.

Going through a bad faith insurance claim, whether auto accident-related or otherwise, can be a daunting as well as confusing process. A personal injury can mean debilitation for life and can even keep you from holding a job. Therefore, you must consider talking to a personal injury lawyer so you can ge all the help you need for the financial compensation you deserve.

In the U.S., it is the general rule of law that every party pays its own lawyers’ fees, known as “The American Rule,” which is different from the English Law, where only the responsible party will pay the fees for both sides.

In certain states, however, there have been judicial exceptions to the American Rule, one of which enables the offended party in an insurance bad faith case to be given attorneys’ fees as part of the award. There are at least three places where these exceptions apply: Pennsylvania, Utah and New York. Again, a veteran attorney can advise you on whether or not lawyers’ fees will be part of the award in your state.