In today's blog post, I am going to address some questions I'm often asked about insurance companies and whether or not they have to treat policy holders or injured folks fairly. While the laws in West Virginia have changed in the last ten years (cutting back on the protections that injured people have) most of the time insurance companies must treat consumers fairly.
What can be done when an insurance company is treating a claim unfairly?
Anytime someone is potentially benefiting from an insurance policy, whether it be life, accident, home or auto, that person should be treated fairly. However, that does not always happen. Sometimes insurance companies decide to make it difficult for a claim to be processed or for the injured person to recover. In that situation, the insurance company is often acting in "bad faith." Sometimes, that can result in further litigation. In other circumstances, a complaint can be filed with the insurance commissioner. It is always best to speak with a lawyer if you believe that you are not being treated fairly.
What is "bad faith"?
When I first started in private practice in the late 1990's, one of kinds of cases that I filed a number of complaints in were cases involving "insurance bad faith." While that is not as common today as it was then (for reasons I'll describe in a bit) it is still a cause of action, or the basis for a lawsuit. When a person is a beneficiary of an insurance policy that he or she purchased to cover an injury, the laws in most jurisdictions require that when that person files a claim with the insurance company, the company has the duty to process the claim in good faith. This generally requires that the insurance company responds in a timely fashion to communications and that the insurance company makes reasonable offers to settle claims. In West Virginia, there are very specific things that the insurance company must do that are established by statute and regulation. You can find those regulations here: . There are also certain duties that are implied in the insurance contract that can be enforced against the insurance company.
What are some of the things that the regulation require that insurance companies do?
These are requirements about communication:
- the insurance company must provide the claimant with penitent policy provisions.
- the insurance company has to acknowledge the receipt of a claim within fifteen days.
- the insurance company has to provide the claimant with forms when they want to make a claim.
If a claimant files a claim, the insurance company has further duties. They include: Every insurer shall promptly conduct and diligently
- the insurance company has to pursue a thorough, fair and objective investigation
- the insurance company may not unreasonably delay resolution by persisting in seeking information not reasonably required
- if the insurance company is going to require a specific form, in most situations, they must provide the form required within 15 days.
- in most situations, the insurance company has to deny the claim or make a written offer within 10 days of completing the investigation.
- the insurance company has to provide specific policy provisions if they are going to deny a claim
With respect to payment on a claim:
- the insurance company has a duty to offer reasonable amounts if there is no dispute as to liability or coverage
- the insurance company has 15 working days to pay on a claim once there is an agreement
So what does this regulation mean to you?
- If you are injured in an accident, the insurance company has to treat you fairly. If they do not:
- If it is YOUR insurance company, you may have a cause of action or a suit against the company and/or a complaint with the insurance commissioner. In many cases, you may receive additional amounts as damages for their failure to comply with the requirements of treating your fair.
- If it is the OTHER person's insurance company, you may file a complaint with the insurance commissioner.
- If you have other insurance claims, such GAP insurance
- You may also be able to pursue a bad faith claim against your insurance company.
What does first party bad faith and third party bad faith mean?
If the bad faith action is by your own insurance company, that is first party bad faith. In that circumstance, West Virginia law supports a claim for you to file suit against the insurance company. Unfortunately, in 2005, the West Virginia legislature enacted new laws that make it nearly impossible for you to file suit in "third party bad faith" or when another persons’ insurance company is treating you unfairly.
What should I do?
When you are dealing with an insurance company, set up a file and keep all of your notes, letters and records. If you have questions about whether or not you are treated fairly, call me, email me or come by the office so that we can discuss your situation and determine what can be done for you to receive what you are due from the insurance company.