By paying insurance premiums, you assume that if you incur costs, the insurance company will cover all or some of those costs according to the terms of your policy.
However, in some cases, an insurance provider refuses to honor the terms or pay out benefits according to the policy without a good faith reason to deny coverage. When you face an insurer who denies you coverage in a way you think is in bad faith, you need an experienced Nashville bad faith insurance attorney to represent you against the insurance company’s teams of adjusters and lawyers.
Having an aggressive and dedicated bad faith insurance lawyer on your side may be critical to getting the insurance benefits you are entitled to. The attorneys of The Employment and Consumer Law Group have the knowledge and experience to review your situation to determine whether your insurer’s refusal to pay benefits or honor other terms of the policy is a bad faith violation of the policy.
If we determine that your Nashville-area insurance claim was denied in bad faith, our attorneys stand ready to bring a claim against your insurer and, if necessary, file suit in court to get you the relief and compensation that you are entitled to.
Contact us now online or by phone to find out how we can help.
What Is Considered Bad Faith in an Insurance Context?
Determining whether to pay an insurance claim is a highly fact-intensive process for insurance companies. Not all denials of coverage or benefits are a sign of bad faith. In many cases, there is a genuine, good faith dispute between an insurer and their insured about the validity of a claim or whether the language of the insurance policy provides coverage for that claim. Even an insurer’s vigorous attempts to deny coverage may not rise to the level of bad faith.
Instead, there are certain factors that experienced bad faith insurance attorneys and courts look at to determine whether an insurer’s denial of coverage was made in bad faith. Generally speaking, bad faith in the insurance context is often characterized by a “demonstrable indifference to or blatant disregard for the interests of the insured.”
Insurance adjusters and insurance law firms may try to put forth seemingly logical reasons for a denial of coverage to cover up the fact that the insurance company is trying to deny the claim in bad faith. Some of the excuses that insurance companies may use to cover up a bad faith denial of benefits or coverage include:
- The insured did not fulfill conditions listed in the policy that are precedent to the payment of benefits or coverage.
- The insured’s claims for coverage are excessive or unsubstantiated.
- The claim does not fall within the scope of coverage outlined in the policy.
- The claim is precluded by exclusionary provisions of the policy.
- The policy had been canceled due to a failure to renew or pay premiums.
In many cases of bad faith denial of benefits or coverage, the insurer will claim that it never received documentation or payments that the insured has sent and thus the insurer is not obligated to act.
Signs of Insurance Carrier Bad Faith
When insurers offer seemingly legitimate explanations for why they are denying benefits or coverage, it can be challenging to determine whether such explanations are merely a smokescreen for the insurer’s bad faith denial of your claim.
If your insurer does some of the following acts, it could be an indication that their denial of your claim is in bad faith and that you may have a claim for compensation:
- The insurer raises contractual or legal defenses that are plainly inapplicable to your situation.
- The insurer fails to undertake a full or reasonable investigation of your claim.
- The insurer fails to make timely payments of a claim.
- The insurer offers absurd, illogical, or tortured interpretations of the policy terms.
- The insurer fails to timely respond to communications from the insured or the insured’s representatives.
- The insurer demands amounts of documentation and information that are out of proportion to the size of your claim or that are only tangentially related to your claim.
- The insurer’s investigators and experts conduct their analysis or investigation to reach a particular conclusion, rather than letting the results of the investigation determine the conclusion.
- The insurer refuses to engage in settlement negotiations or makes unreasonably low settlement offers.
If you have experienced any of these or similar behaviors from your insurer, you should immediately speak with a Nashville bad faith insurance attorney to discuss your situation in further detail. We can determine whether the insurance company may be engaging in bad faith with respect to your insurance claim.
Legal Protections for You
Fortunately, if your insurance company is acting in bad faith on your insurance claim, the law offers you protections. Tennessee Code §56-7-105 imposes liability on insurers that refuse in bad faith to promptly pay benefits and coverage.
In addition to damages in the amount of the benefits that the insurer wrongfully denied (plus interest), the statute imposes additional liability on the insurance company, depending on the following circumstances:
- If the company is located in the state of Tennessee or doing insurance business in the state, and refuses to pay a loss within 60 days of a demand made by the policyholder, an additional liability not exceeding 25 percent of the liability for the loss, which shall include additional expenses, losses, injuries, or attorneys fees incurred by the refusal to pay. It must be demonstrated to the court or jury trying the case that the refusal to pay was in bad faith.
- If the company is an unauthorized insurer and refuses to pay a loss within 30 days of a demand made by the policyholder, an additional liability of up to 12.5 percent of the judgment to cover the policyholder’s reasonable attorneys’ fees. It must be shown to the court that the failure to pay was “vexatious and without reasonable cause.” An insurer’s failure to defend against a policyholder’s action is prima facie evidence of vexatiousness or lack of reasonable cause in this case.
What to Do If You Think You Are the Victim of Bad Faith
If you believe an insurance company has denied you benefits or coverage in bad faith, you need to move quickly to preserve and assert your claim. Although Tennessee has a six-year statute of limitations for breach of contract claims, many insurance policies impose a much shorter period to bring any claim against the insurer for refusal of payment.
You can begin by speaking with an experienced Nashville bad faith insurance attorney to learn whether you may have a claim for bad faith denial of benefits and coverage. To launch a legal claim for bad faith denial of insurance benefits and coverage, you must have also met the following conditions:
- You have indicated that your insurance claim is due and payable.
- You have made a formal demand for payment to your insurance company.
- You have waited at least 60 days (or 30 days in certain circumstances) before filing a bad faith denial claim, or alternatively, the insurance company has made an outright refusal to pay.
- You allege that the denial of benefits and coverage was made in bad faith.
How Our Nashville Bad Faith Insurance Lawyer Can Help You
If you are pursuing a claim that your insurance company denied you benefits or coverage in bad faith, the Nashville bad faith insurance lawyer of The Employment and Consumer Law Group can help you seek the benefits you were originally entitled to along with the additional damages and compensation you are entitled to for the insurance company’s bad faith actions.
Our legal team can help you by reviewing the terms of your insurance policy. Most policies are complicated, dense documents not easily understood by most policyholders. Our legal team can determine whether the insurance company’s actions merely reflect a good faith dispute over the applicability of coverage to your claim or instead indicate the insurance company’s attempt to deny coverage in bad faith or for malicious reasons.
If the facts of your case show that your insurer is acting in bad faith, our legal team can immediately contact your insurer to inform them of the illegal nature of their acts. If the insurer knows that a policyholder is represented by an aggressive and knowledgeable attorney, they may be less likely to continue pursuing their bad faith actions.
Our legal team can help by negotiating a swift and favorable resolution to your insurance claim. However, if the insurance company persists in denying your claim in bad faith, our legal team can vigorously pursue compensation for you in the courts.
If you are being denied the insurance benefits and coverage you have paid for due to the bad faith acts of an insurance company, don’t wait another day to begin pursuing the compensation you are entitled to.
Contact The Employment and Consumer Law Group today to schedule a consultation with a Nashville bad faith insurance attorney to discuss your case in more detail and to learn more about your legal rights and options.