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Bad faith claims against insurance companies in Arizona under scrutiny

A proposal currently in the Arizona House would require bad faith claims to be submitted within 60 days of the bad faith occurrence.

Some Arizona lawmakers are looking to make it more difficult to allege bad faith denials by workers’ compensation insurance companies

The Arizona House Committee on Insurance recently heard testimony regarding House Bill 2334, which would make it more difficult for injured workers to file bad faith claims against insurance companies that have rejected their workers’ compensation claims.

Under the bill, injured workers would have to file a bad faith claim within 60 days of the date in which the bad faith act occurred. It would also move such claims to the Industrial Commission of Arizona, rather than in Superior Court where they are currently held. The Industrial Commission would also determine whether the insurance company must pay workers’ compensation to the injured worker, and how much.

Insurance company lobbyists are backing the bill, some of whom testified before committee to argue that bad faith claims are currently too expensive for insurance companies. In the last five years, there have been 44 bad faith claims filed in Arizona, which represents about .001 percent of all workers compensation claims made in the state. Of the 44 bad faith claims made by injured workers, it is unclear how many, if any, were frivolous.

The bill does increase the overall cap the civil penalty faced by insurance companies to $5,000. Of course, relative to the amounts faced by injured workers who are unfairly denied claims, that is still a paltry amount.

As yet it is unclear if the bill will pass.

Injured workers facing increasing difficulty with workers’ compensation

In recent years, there has been much discussion regarding the “grand bargain” entered into between workers and employers a century ago that started the workers’ compensation system. Through that system, injured workers agreed to forego lawsuits against employers on the condition that they receive insurance payments should they become injured at work.

It has become much more difficult for injured workers to receive benefits under workers’ compensation than ever before, however. Arizona Public Radio recently aired a broadcast regarding workers’ compensation “reforms” that are gouging workers out of the benefits of workers’ compensation. An NPR and ProPublica study showed that many states, including Arizona, are making it very difficult for injured workers to recover under the workers’ compensation system, with “disastrous” results. For example, in Arizona employers can force injured employees to be seen by a doctor they choose.

That is why injured workers in Arizona should obtain experienced representation after becoming injured at work. Workers’ compensation is a complex system that is increasingly difficult for injured workers to navigate on their own.

At Crossman Law Offices, P.C., our team exclusively handles work injuries in order to provide the best services to our clients. Contact Crossman Law Offices to discuss your situation and options as soon as possible after suffering a work injury.