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An insurance company acts in bad faith when it refuses to pay out for a valid claim and engages in other aggravating or outrageous conduct. An example of bad faith would be what many people experienced after hurricanes. For example, if there was a five-month passage of time between when the insurance company adjuster first observed the damages to a plaintiff’s home and when a check was issued to them.

Bad faith in the insurance business reflects poorly on an insurance company because the company is supposed to be there for the insured when a loss is covered under their policy. People pay insurance premiums for years, and companies that refuse to pay a valid claim ⁠— or severely underpay a claim ⁠— reflect poorly on the entire insurance industry and deter people from purchasing policies in the future.

If you believe that your insurance company has treated you unfairly, you could benefit from the professional guidance of a skilled insurance claim denial attorney. A seasoned Wilmington bad faith insurance lawyer could help you hold a negligent company accountable for failing to pay you the compensation you need and deserve.

Determining an Insurance Company’s Liability for Bad Faith

The only way to determine whether an insurance company is liable for bad faith is to take the issue to court. Qualified legal counsel can advise a person on whether they may have a claim by analyzing the specific facts of their case. Insurance companies who do not adequately communicate with an insured or fail to listen to their concerns about a claim could be held liable in a claim for damages. If someone’s insurance company is refusing to pay for something they believe is covered under their policy, or they feel the company is being unreasonable, they should hire an experienced Wilmington bad faith insurance attorney.

Available Damages Against Insurance Companies

A successful bad faith insurance claim may result in a compensatory award and punitive damages. A compensatory award would cover a claimant’s losses which directly resulted from a company’s negligence, whereas punitive damages are designed and awarded to punish a company for particularly egregious conduct and deter others from acting similarly in the future.

According to state law, the amount of punitive damages that can be awarded depends on the circumstances of each case and can be either $250,000 or three times the compensatory award — whichever is greater. There is a similar type of claim that relates to bad faith called an unfair claim settlement practice, which is closely related to the unfair and deceptive trade practice claim law.

Circumstances which constitute an unfair claim settlement practice include failing to act promptly on communications and failing to adopt and implement reasonable standards for investigating claims. Additionally, refusing to pay a claim without conducting a reasonable investigation based on all available information as well as attempting to settle a claim for less than the amount that a reasonable person would believe they are entitled to could form the basis of a successful bad faith suit. A dedicated bad faith insurance lawyer in Wilmington could help a claimant determine whether their cases fall under one of these categories. If the insured’s claim is successful, they would be entitled to treble damages.

Call a Wilmington Bad Faith Insurance Attorney Today

Whether your insurance company has denied you payments for a situation that is covered under your policy, or they are neglecting to communicate with you about your claim, you should retain legal representation to help you advocate for your rights. If your insurance issue needs to be brought to court, get in touch with a knowledgeable Wilmington bad faith insurance lawyer who could help you navigate the complexities of policy nuances in the context of court proceedings. For help with initiating litigation against an at-fault insurance company, call today and learn more about your legal options.