Insurance Company “Bad Faith”

Posted in Workers Compensation on August 9, 2022

Insurance policies are supposed to be there when you need them the most. However, if you expect to receive an insurance settlement for a valid claim but the insurance carrier refuses or otherwise makes it very hard to cover the compensation you need, they may be operating in bad faith. Here, we want to discuss what bad faith insurance practices look like and what you can do if this happens to you.

What Arizona Law Says About Insurance Bad Faith

Insurance bad faith laws vary from state to state. In Arizona, state law considers every insurance contract to be an implied covenant that requires good faith and fair dealing by the insurance carrier. If the insurance carrier breaches this contract, it could result in a tort claim against the company.

In this state, there are strict timelines for filing claims related to bad faith insurance. If a person believes that the insurance carrier has treated them unfairly and in bad faith, the individual has two years to file a lawsuit against the insurance carrier. The clock begins ticking from the date the bad faith Insurance act was committed, so we strongly encourage any individual in this scenario to reach out to an attorney who can help them.

How to Prove Bad Faith

There are two main elements of insurance bad faith that must be proven in order for a claim to be successful.

1. The first element revolves around showing that the insurance carrier acted unreasonably. This could include establishing that the insurance carrier withheld benefits, failed to adequately investigate the claim, intimidated or threatened the claimant, misrepresented the terms of the policy, unjustifiably denied the claim, lied about the facts of the case, offered unreasonably low settlements, altered the insurance policy without the policyholder’s knowledge, etc.
2. The second element in these cases is showing that the insurance carrier knew that their conduct was unreasonable or showing that the insurance carrier’s conduct was so reckless or egregious that they should have known it was unreasonable. The Arizona Unfair Claim Settlement Practices Act establishes the guidelines that an attorney will use to determine whether or not the insurance carrier’s conduct was reasonable, and a deviation from this standard will typically indicate unreasonable conduct on the part of the insurance carrier.

Contact a Lawyer Immediately

Bad faith insurance claims can be complex, and we strongly encourage individuals to reach out to an attorney as soon as they think the insurance carrier has treated them unfairly. Individuals in these situations may be able to recover various types of compensation. Not only does this include compensation they’re owed for the original claim, but also compensation related to the bad faith claim. Essentially, they could recover a substantial amount above and beyond what they originally would have had the insurance carrier not acted in bad faith.

Our Phoenix workers’ compensation lawyers will fully investigate the claim, look into the original case, and work diligently to recover fair compensation for their client. This could come in the form of a settlement or, if necessary, a trial by jury.