Fact-Checked: Why Trust Rittgers Rittgers & Nakajima When you purchase insurance, whether it’s for your health, home, car, or business, you trust that your insurer will be there when you need them most. But what happens when they aren’t? Bad faith insurance practices can leave policyholders stranded, facing unexpected financial hardship when claims are unfairly delayed, denied, or underpaid. Understanding what constitutes bad faith and recognizing the red flags can help you stand up to unfair treatment.
In the legal sphere, the term “bad faith” refers to a dishonest purpose, conscious wrongdoing, and breach of a known duty through some ulterior motive or ill will to commit fraud. Bad faith is commonly seen in regard to insurance companies, which occurs when an insurer fails to process, pay, investigate, and settle claims without reasonable justification. The law requires insurance companies to act in good faith due to the nature of the relationship between the insurer and the insured, and a failure of this duty opens the door for the insured to sue the insurer.
Insurance companies do this for a simple reason: to save themselves money. Insurance companies make money through their “collect now, pay later” model of collecting monthly payments with the promise of having that money for you when you are injured. But, if they delay that payment they hope you will accept less money than you deserve or simply give up. Without reasonable justification for the delay, this is illegal.
Types of Bad Faith
In Ohio, insurance companies can be taken to court for bad faith when they: (1) when an insurer intentionally refuses to pay a claim without any lawful basis and they have knowledge of that fact, and/or (2) when an insurer intentionally fails to determine whether there is any lawful basis for refusing to pay a claim.
First Party Bad Faith
First party bad faith occurs when an insurance company refuses to pay an insured’s claim without a reasonable basis or without investigating the claim in a timely manner. Ohio law allows first party bad faith lawsuits to be brought before the court for failure to investigate, refusal to pay, failure to settle a claim, and even failure to defend against third parties.
Third Party Bad Faith
Third party bad faith involves liability insurance, usually with the insurance company of the party who hurt you originally. Although this insurance company does not owe you the same amount of duties as your own insurance company, you are still protected by the law. The third party insurance company still owes to you the duty to investigate a claim and settle it within a reasonable amount of time. The failure to do so may allow you to sue the third party insurance company.
What To Do If You Have Been Treated In Bad Faith
If you think your insurance company has been acting against you or a loved one in bad faith, you are entitled to your entire claim file with your insurance company up until the time that the company pays the claim. You are entitled to find out whether your insurance company is acting in bad faith and delaying your payment without reasonable justification. However, these cases are not easy, as insurance companies will fight hard to ensure that they spend as little money as possible, even if it is owed.
By suing your insurance company for bad faith, not only will you be gaining the money you were originally rightfully entitled to, but you can also receive monetary damages for emotional distress, attorney’s fees, and additional monetary damages for the insurance company’s wrongdoing.
Bad faith insurance practices can be overwhelming and intimidating, but you don’t have to face them alone. If you believe your insurance company has acted unfairly or unlawfully, it’s essential to know your rights and explore your options for holding them accountable. Our team is here to guide you through every step of the legal process, ensuring that your voice is heard and that you receive the compensation you deserve. Don’t let insurance companies profit at your expense—reach out to our experienced attorneys today to discuss how we can help protect your interests and secure justice on your behalf.