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How To Prove Bad Faith In Court

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Have you ever felt wronged by an insurance company? Like they deliberately denied your valid claim or took advantage of the fine print? You guessed it – that’s bad faith.

These companies have a legal duty to act in “good faith”, dealing with you honestly and fairly. But when profit comes first, things can get ugly.

Maybe they denied your claim for no good reason. Or deliberately lowballed a settlement offer. How about refusing to properly investigate your case? That’s bad faith too.

If this sounds familiar, you need to hold them accountable in court. Easier said than done, but winning is possible. This guide will prepare you to build an airtight bad faith case. Let’s dive in!

Gather Irrefutable Evidence

Building a convincing bad faith case starts with evidence. You can’t just yell “bad faith” and expect results. Instead, use these strategies to demonstrate unreasonable behavior:

Leverage Expert Witness Testimonies

Expert witnesses have in-depth understanding of claim handling practices. Their perspective carries weight in distinguishing bad faith actions from standard protocol. Consider hiring professionals like retired claims adjusters or veteran attorneys specializing in these cases. A qualified expert can analyze the claim file and identify red flags proving your denial was baseless.

Uncover Corporate Claim Handling Policies

During evidence discovery, get your hands on internal claim manuals, training materials and company literature. Shady practices like denying valid claims could be encouraged directly by leadership. Explicit guidelines to exploit customers for profit help build your argument.

Review the Claim File with a Fine-Tooth Comb

Your claim file contains a complete record of the insurance company’s handling of your case. Alongside communications and investigation details, these notes reveal adjusters’ true impressions and intent. Uncover candid remarks dismissing your claim despite clear eligibility. These documents make or break most bad faith lawsuits.

Pinpoint Unreasonable Delays

Insurance companies use delay tactics to avoid or reduce payouts, hoping you’ll accept lowball settlements or simply give up. Track timeline inconsistencies like long gaps without communication or skipped deadlines without cause as evidence of stalling. Even if your claim was correctly denied, delays in the process can still qualify as bad faith.

Reveal Misrepresentations of Fact

Another frequent offense is claims handlers distorting facts to justify wrongful denials. For example, taking aspects of your medical history out of context to allege a condition is preexisting. Make sure to document each case of statements fraudulently made to influence unfair claim determinations.

Understand Key Legal Standards of Bad Faith

While specifics vary slightly by state, definitions of bad faith usually stem from both statutory insurance regulations and precedent common law rulings. Here are some pivotal concepts:

Statutory Violations

Each state’s insurance code declares unfair claim handling practices illegal. For example, California’s insurance statutes ban denying claims without probable cause, refusing reasonable settlements, failing to explain denials properly, and more. Cite chapters and verses!

The Genuine Dispute Doctrine

This guideline used often in California states there cannot be bad faith if a genuine, reasonable dispute exists over claim facts or policy interpretation after an appropriate investigation. The burden is on you to prove no such dispute exists.

Common Law Standards

Drawing from centuries of legal tradition, judges may also determine bad faith according to “common law” unwritten standards observed throughout similar cases. Requirements vary by state but often boil down to deliberately unreasonable conduct.

Financial Elder Abuse

If either an elderly or disabled policyholder suffers extreme economic loss due to an insurer’s clearly unfair claim actions, additional damages may apply under state financial elder abuse laws.

Build Your Case Around Unreasonable Claim Denials

While delays and deception can strengthen your argument, at its core a bad faith claim arises from wrongful denial of entitled benefits. Focus on these improper techniques used to avoid payouts:

Ignoring Supporting Evidence

Insurers may intentionally disregard facts contradicting their denial rationale, including medical records, expert opinions, financial statements and more. This willful negligence suggests outcomes were pre-determined regardless of legitimacy.

Cherry-picking Negative Details

Similar to the above, adjusters drill down on minor scrap of unfavorable evidence (like a single negative MRI amidst 10 positives) while ignoring the overwhelming weight of corroboration.

Failure to Properly Investigate

Incomplete, biased investigations missing key details reveal a deliberate attempt to construct evidence limiting liability rather than determine truth. File complaints show little inquiry before jumping straight to denials.

Covering Up Known Mistakes

Sometimes insurers realize a wrong call was made but conceal it to avoid paying out. For example, internal emails saying “deny this but we’ll probably lose upon appeal” while telling you no further recourse exists. Destroying these incriminating documents (illegal!) proves knowledge of wrongdoing.

Highlight Malicious Claim Handling Practices

Even in cases where the end denial had some merit, bad faith can stem from unreasonable behavior controlling the process. Like these underhanded techniques:

Deliberately “Lowballing” Claim Value

When clear documentation proves a loss well into six figures, offering five thousand dollars shows contemptuous disregard for fairness. Such extreme attempts to take advantage of victims confirms ill intentions.

Forcing Unnecessary Medical Exams

Requiring extra doctor visits when no need is warranted serves no purpose beyond stalling, harassing policyholders, and running up tabs in hopes folks abandon their rightful claims.

Using Common “Stall Tactics”

From buried denials letters to endless requests for mundane documentation, insurers have mastered the skill of avoidance. While each instance seems harmless, collectively these procedural delays betray strategic stonewalling.

Failing to Explain Reasoning

Responding to inquiries with stock language like “the claim is denied” without addressing specifics demonstrates a lack of transparency and accountability. Hiding internal reasoning reeks of bad faith.

Secure the Biggest Payout Possible

Punishments for insurers guilty of bad faith range from fines to big money awards. With the right evidence and legal argument, you could win:

Punitive Damages

These extra penalties specifically punish malicious wrongdoers as an example to deter future misconduct. Judges may grant up to 9 times your actual financial damages!

Emotional Distress Compensation

The stress of unfair claim denials warrants additional payouts for associated mental anguish and suffering. Expert testimony from therapists helps justify distress claim value.

Attorneys Fees

Most states mandate the insurance company pays your lawyer bills if the court finds bad faith actions. So you need not worry about high representation costs.

Treble Damages

In some states like Colorado, bad faith directly translates to automatic triple damages – if they shorted you $20k, now they owe $60k! That’ll teach ’em…

Submit Regulatory Complaints Too!

Even as you build a civil case, also report insurer mistreatment to state authorities for investigation:

File With Your State Department of Insurance

These oversight agencies can sanction companies for violation of claim handling standards, especially if they identify a pattern of systemic abuse across other cases.

Contact Your State Attorney General’s Office

Escalate your complaint to the consumer protection division, which may initiate legal action against the insurer if conclusions align with your allegations.

Having regulators in your corner certainly bolsters odds of a positive legal outcome.

Trust Experienced Counsel

With so much at stake in these high-intensity legal battles, enlist support from a qualified bad faith attorney to even the playing field. Seasoned lawyers intimately understand common insurance company exploits and how to counter them effectively in court. Their expertise can maximize your payout many times over compared to accepting lowball buyout offers.

Plus – remember that sweet attorneys fees provision? Lawyering up costs you nothing extra if your case succeeds. And most bad faith attorneys work on contingency, meaning they only get paid if you get paid. It’s a no brainer.

Don’t Get Mad, Get Justice!

Insurers bank on most people accepting claim denials at face value rather than questioning motives and investigating recourse. But you can beat them at their own game by understanding what constitutes bad faith, methodically building an evidence-backed case, and refusing to be taken advantage of.

Stand firm for the coverage you paid for. Hold negligent carriers financially liable for unethical business practices. When policyholders push back, the entire industry shifts towards accountability – so fight the good fight!

Here’s the bottom line: if your insurance company screwed you over, make them pay. Big time. Your bank account will thank you!