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Victor C. Mitchener, Attorney

Joseph H. Downer, Attorney

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Is bad faith common with car insurance companies?

On Behalf of | Sep 8, 2022 | Personal Injury

We have all dealt with bad faith after a motor vehicle accident. Whether it is a negligent driver blaming you for an accident they caused, or an insurance company claiming they do not cover something that they must cover, we have all dealt with bad faith after crashes. Is it common for insurance companies to act in bad faith?

Historically, it has been common enough that every state regulates and outlaws bad faith insurance practices, also known as unfair claims practices. These days, unless there is a natural disaster or unless you are dealing with an underfunded or cut-rate insurance company, it is not that common. However, that does not mean that you will not deal with it after a car accident.

How do I spot illegal bad faith insurance practices?

The first sign that you are dealing with bad faith is usually if the insurance company of the negligent driver says that they do not cover this or that. For example, we do not cover for medical issues or loss work, or we only cover the cost of your car. While an insurance company can have limits, the insurance and their insured are responsible for all your damages, period.

More signs of bad faith

One sign of bad faith could be the insurance company offering you an extremely low amount to settle the claim without any justification. Every offer must be justified, and every adjuster’s estimation must have a reasonable basis that they explain. If the insurance company or adjuster refuse to justify or do not have a basis, it is like that the insurance company or adjuster is acting in bad faith.

Moreover, if the insurance company refuses any evidence you submit, or they do not factor that into their determination, then they have acted in bad faith. Finally, if they take an unreasonable amount of time to process your claim or respond to your inquiries, that too can be evidence of bad faith.

What to do next

If you call out the insurance company or adjuster, they will stop. They do not want you to report them to the state’s regulatory body, and they certainly, do not want you to call an attorney. Though, that is usually, exactly what you should do when you suspect bad faith.