Insurance Bad Faith Lawsuits
Bad faith claims arise when a company with whom you have a contract fails to act within the terms of that contract. In the case of your insurance company, this may happen if it fails to promptly or properly defend or pay a claim. An insurance company has a duty to deal fairly with its customers, giving more consideration to its insured customers than to its own interest. Whenever your insurance company fails to honor its obligations in its contract with you, you may have a claim for bad faith. An insurance company is required to investigate all claims and find out information about anything that might support their insured’s claim.
Insurance contracts are written to reflect current case law. Known terms which seem self-evident to the insured may actually have special interpretations to the insurance company and not to the insured. All insurance contracts are interpreted in a court to carry out the reasonable expectations of the insured party. The contract will be studied to obtain its meaning, and such meaning must be clear and unmistakable. Generally, any terms which are not clear will be interpreted to benefit the insured. You do not have to prove that the company intended to cause harm, only that they failed to honor their agreement and had no cause not to pay the claim.
Other Insurance Fraud Cases
The term “Insurance Fraud” often brings to mind the insurance claimant who manufactures or fakes an injury in order to bilk an insurance company. However, in the context of “Mass” and “Class” legal actions, it is the insurance company that is accused of committing the fraud and bilking the insured, not the other way around.
One area that has been ripe for mass legal action is what is known as the “Vanishing Premium” case. These cases involve customers being falsely told that if they make their premium payments for a certain amount of time (for example, 10 years) they never have to make any other premium payments and the policies will pay for themselves at that point, or that premiums on universal life policies are “fixed”, when in fact the premiums will require increases in order to maintain the policy in later years.
May major companies have been involved in legal wranglings over these types of allegations.
Race-based Premium Discrimination
Another area ripe for mass legal action involves the sale of race-based insurance premiums. During the 1930’s through the 1970’s, several insurance companies engaged in the shameful practice of charging “race-based insurance premiums” on so-called “burial policies” and/or “industrial life policies”. This reprehensible practice involved a national scheme to unlawfully charge African Americans higher insurance premiums based solely on the color of their skin.
If you are in need of legal assistance to bring or defend against an insurance bad faith or other insurance fraud claim, call our office at 800-909-LAWS (5297) or submit an online questionnaire through this website. Because all cases have a statute of limitations that bar claims after a particular period of time has passed, please call right away to ensure that you do not waive your rights by waiting too long.