Types of Damages in Insurance Bad Faith Claims

If your insurance company unfairly denied your valid claim, they are acting in “bad faith.”

You’ve had your insurance policy for years, paying the premium each month in good faith. You rest easy, knowing that, if something happens, you will be covered.

And then, the unthinkable happens. You have a car accident. Your child is diagnosed with a disease. Your spouse slips and has to recuperate in a nursing home.

Yet when you go to file a claim, the insurance company either outright denies it or engages in delay tactics. They may go to great lengths to dispute that your claim is valid.

Don’t panic. It’s still possible that you can recover damages by filing a bad faith claim against the insurance company.

To learn your options, contact Doug Terry today at (405) 463-6362 and speak to an advocate who isn’t scared to stand up to the insurance company. In fact, he has a lot of experience taking on insurers and winning the battle.

What Is a Bad Faith Claim?

There can be legitimate reasons for an insurer to deny a claim, but if a claim is either denied or underpaid unfairly and unreasonably, the company is not acting in good faith.

When you buy an insurance policy, the terms are clearly spelled out in the original contract and subsequent renewal policies. Sometimes, the insurance company will deny a claim because they rightfully believe they don’t owe it. If they have a good reason to deny, it’s not a wrongful denial.

However, at other times the insurance company will dispute, deny, or delay payments for no legitimate reason, placing an undue burden on the client in a time of emotional and physical duress. Moreover, they may have failed to properly and fairly investigate the claim properly in the first place, leading them to reach a false conclusion about its legitimacy. The duty of good faith requires your insurer to treat you fairly and reasonably. When they don’t, you can do something about it.

Reasons You Can File a Bad Faith Claim

When the insurance company unreasonably and unfairly denies a valid claim they are in acting in “bad faith,” an area of tort law established by the Oklahoma Supreme Court that allows individuals to sue for greater damages than they would have received from the original claim. In the state of Oklahoma, you may have a bad faith claim for any of the following reasons:

  • Coverage denials
  • Underpayment of claims
  • Delay of payment
  • Refusal to properly defend a claim.

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What Kind of Damages Can Be Awarded in Bad Faith Claims?

  • Contract damages are the amount of money the insurer rightfully owed under the policy, up to the policy limit.
  • Compensatory damages are an amount of money to compensate you for what the insurance company’s bad faith put you through. This means you may be entitled to additional damages for the emotional distress that you experienced while struggling to cope with the fact that you had been denied coverage or received funds that were insufficient to pay your bills. You can also receive additional damages if the denied claim caused you to suffer anger, embarrassment, humiliation, financial hardship,or the loss of your professional reputation.
  • Punitive damages are designed to punish an insurance company for its bad faith conduct and deter it from doing the same thing to other policyholders. These damages may be awarded in addition to contract damages and compensatory in bad faith claims on a case-by-case basis, depending on how egregious the behavior of the insurance company in question is.

What Types of Claims Are Covered?

Bad faith claims apply in a wide variety of insurance types. Here are some examples.

Health Insurance

Health insurance companies may be acting in bad faith if they deny your claim for medical treatment based on bogus reasons. Health insurance companies sometimes argue your treatment is not covered based on the opinions of unqualified or untrained doctors. Often the company will claim the treatment is “not medically necessary” or is “investigational or experimental.” Sometimes health insurance companies ignore the evidence presented to them, refuse to conduct (or improperly conduct) an investigation, delay payment, or use minor bureaucratic or procedural requirements against you. When a health insurance company gets between you and your doctor in this way, they may very well be in bad faith.

Auto Insurance

Almost everyone carries auto insurance, and insurance claims often come up because of a car wreck. Your auto insurance company may be acting in bad faith if they unfairly deny a claim to cover either the injuries you suffered as the result of the accident (like medical bills, future treatment, or pain and suffering) or the property damage to your vehicle.

Property Insurance (homeowner’s, commercial property, renters insurance)

An insurance company may be acting in bad faith if they deny a claim for damage to your property, like your house, your business property or your personal property. These claims arise under homeowner’s insurance, commercial/business insurance or renters insurance. Many claims arise from storm damage, especially wind, hail or tornadoes, but can be related to damage caused by any insured cause of loss.

Disability Insurance

Disability insurance is designed to award insured individuals at least partial compensation for their salary should they become unable to perform their material work duties for a defined period of time. You can file a bad faith claim against the insurer if, for example, it wrongfully denies the claim or uses delay tactics to avoid making prompt payments.

Long-term Care Insurance

Long-term care (LTC) insurance protects individuals from losing their assets if they are forced into nursing home care or an assisted living facility, or require home health care resulting from an injury or declining health. Denied claims may simply be ploys to avoid the cost of honoring your contractual agreement with the insurance company, such as requiring unreasonable documentation to support the claim or making a false interpretation of the nursing assessment.

The statute of limitations for bad faith claims depends on what type of insurance coverage you have; it is best to consult a lawyer to find out how long you have to file your claim.

Was Your Insurance Claim Denied?

Our insurance bad faith attorney can help you get the compensation you deserve if you were wronged by an insurance company.

The Oklahoma law offices of Doug Terry specialize in handling bad faith claim cases. With years of experience fighting health, major medical, automobile, homeowners, disability, life and commercial insurance companies, Doug has devoted his practice to making sure that you and your family receive the money to which you are entitled.

Call (405) 463-6362 to schedule a free consultation today. You won’t pay any fees unless we win or settle your case.

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