Recognizing When an Insurance Company Is Acting in Bad Faith

If you’ve suffered injuries in an accident, you might reasonably expect your insurance provider to handle your claim in a fair, timely manner and to pay out what you are owed. Unfortunately, insurers have been known for unfair tactics, such as delaying or denying valid claims. These is known as bad faith. It’s important to recognize these tactics and to understand your rights and remedies.

Insurer bad faith, simply put, occurs when an insurance company fails to manage a claim honestly or to make reasonable efforts to resolve it. This misconduct can take many forms, such as: 

• Delaying review of paperwork or failing to communicate progress 
• Refusing to thoroughly investigate a claim
• Making settlement offers far below your demonstrated losses 
• Misrepresenting policy language to minimize payouts or deny coverage

These bad faith tactics aren’t limited to car accident cases. They can affect all kinds of personal injury claims, including those for slips and falls and for injuries caused by defective products. When insurers don’t play fair, victims can be left facing mounting medical bills and other losses.

Unlike many other states, New York does not have a specific statute addressing insurer bad faith. However, under common law, an insurer owes its policyholders an implied duty of good faith and fair dealing when handling claims. This generally means that the insurer must:

• Give priority to the insured’s interests and not put its own financial interests ahead of them.
• Conduct a prompt, thorough and honest investigation.
• Communicate honestly, which includes keeping the insured informed about claim status, answering inquiries, explaining reasons for denials and not misrepresenting policy terms.
• Consider reasonable settlement opportunities.

If the insurer’s conduct is so reckless or indifferent that it amounts to a gross disregard of the insured’s interests, the insurer may be liable for damages beyond policy limits. 

Note that while the law protects policyholders from unreasonable, dishonest or self‑serving claim practices, building a successful case of insurance bad faith is difficult. It requires strong documentation of delays that cause financial harm, misrepresentation of policy terms, failure to settle within policy limits, wrongful denial of coverage or reckless or intentional mishandling of claims. 

You don’t have to face insurance companies alone. A personal injury attorney can efficiently manage all communications with the insurer, compile critical evidence and push back against drawn-out delays or unjust denials. If negotiation fails, an attorney and bring your case to court and seek the insurance benefits and excess damages you deserve.

The law firm of Jakubowski, Robertson, Maffei, Goldsmith & Tartaglia, LLP, located in St. James, NY, offers dedicated legal representation for people injured in accidents throughout Long Island. Call us at 631-360-0400 or contact us online for a free initial consultation.