Insurance companies pay most of the successful personal injury claims. That’s good in one sense, as insurance companies almost always have enough money to pay a personal injury claim, although every policy has a maximum claim amount.
Ultimately, however, insurance companies are for-profit businesses, not public charities. Consequently, they will do what they can to minimize their payout.
Car Accidents: Louisiana Requires Every Driver To Purchase a Minimum Amount of Liability Insurance
Car accidents deserve special mention because they are probably the most common basis for a personal injury claim. Louisiana, like most states, requires every driver with a car registered in the state to purchase the following minimum amounts of insurance:
- $15,000
- $30,000
- $25,000
Some drivers purchase more than these minimum amounts of car accident insurance. Commercial truckers, for instance, must generally purchase higher amounts than automobile drivers. The same applies to on-duty Uber and Lyft drivers.
Unfortunately, about 14% of Louisiana automobile drivers break the law by failing to purchase any insurance at all. However, the uninsured motorist percentage among on-duty Uber/Lyft drivers and commercial truckers approaches zero. You can protect yourself against stingy motorists by purchasing uninsured/underinsured motorist insurance before an accident.
Insurance Company Excuses To Deny Your Claim or Pay You Less
The most common excuses that insurance companies use to deny or reduce your claim include:
- Comparative fault: Proving that the accident was partly your fault can reduce or eliminate your compensation.
- Pre-existing injury: Claiming that your injuries predate the accident.
- Claiming that your injuries didn’t occur until after the accident. This might happen if you delay medical treatment, for example.
- Insufficient documentation. See below for details on how an insurance company might use this as an excuse.
The foregoing represents a few possible excuses for denying your claim or reducing its amount.
Insurance Company ‘Black Hat’ Tactics
Following are some common insurance policy practices that, while not necessarily illegal, are unethical:
- Lowball offers: Offering you 10% of the true value of your claim, for example. The insurance company hopes you’re becoming desperate for any settlement as medical bills pile up and you miss work.
- Frequent changes in claims adjusters: Switching insurance adjusters during the claims process takes time. That’s the idea, as the statute of limitations clock ticks in the background. If the insurance company does this repeatedly, it’s probably a delaying tactic.
- Burying you in an ocean of documentation requests: A certain amount of documentation is necessary to resolve a claim. Your ex-spouse’s DNA profile, however, is not. Again, the idea is to delay your claim’s processing and wear you down.
- Communication delays: Taking an unusually long time to respond to your questions or provide updates on your claim.
- The use of incomprehensible ‘legalese’ in documentation to create further barriers.
- Misrepresentation of policy language: This practice might be barely legal (although unethical) if the insurance company’s interpretation of policy language is misleading but not outright false.
- Excessive investigation: An insurance company can find excuses to “further investigate” your claim from now until the day after the statute of limitations deadline arrives.
- Discouraging you from hiring a lawyer. This might even come in the form of a veiled threat that hiring a lawyer will slow down the claims process. It won’t.
- Making you an inadequate settlement offer while you’re still in the hospital, woozy from medication.
- Basing claim decisions on outdated policy information or ignoring recent evidence that you provided the insurance adjuster.
This list is far from exhaustive.
Tactics That Cross the Line Into Insurance Bad Faith
Skillful negotiation is not your only possible response to an insurance company’s bullying. If they go too far, you can file a second claim against them for bad faith insurance. Here are some examples of actions that probably constitute insurance bad faith:
- Denying your claim without a reason: “Paying your claim would eat into our profit margin” is not a valid ‘reason.’
- Refusing to pay an obviously valid claim: Ignoring clear coverage under the policy you are claiming against to avoid paying you.
- Failing to conduct a proper investigation or failing to investigate at all.
- Delaying claim processing without a good reason. Sometimes, this constitutes insurance bad faith, and sometimes it constitutes unethical, barely legal behavior.
- Threatening you for pursuing your claim.
- Altering the details of your insurance application without your consent to justify denying your claim.
- Misrepresenting the law or the terms of your policy. Offering misleading information that is not an outright lie might be barely legal, however.
- Failure to disclose policy limits: The insurance adjuster might conceal the limits of the policy, especially if these limits are more than the amount you are demanding. You can guess why an insurance company might want to do this.
- Ignoring judgments or arbitration awards: Even if you win your case in court, the insurance company can still refuse to pay if they are convinced you won’t do anything about it.
It’s often a judgment call whether a particular insurance company’s action or failure to act constitutes insurance bad faith or merely unethical behavior. A lawyer can help you discern the difference.
The Legal Elements of an Insurance Bad Faith Claim
To win an insurance bad faith claim, you must prove the following three facts:
- The insurance company is obligated to pay you under the policy terms. It doesn’t have to be your insurance policy; it can be the defendant’s liability insurance policy.
- The insurance company failed to pay you all the money it owed you after you gave them satisfactory proof of their liability and the amount of the debt.
- The insurance company’s treatment of you was arbitrary, capricious, or without a good reason.
The third element is the most difficult of the three elements to prove. You will probably need a lawyer’s help.
Using a Possible Insurance Bad Faith Claim as Bargaining Leverage for Your Personal Injury Claim
Using a valid or apparently valid insurance bad faith claim as bargaining leverage in personal injury claim settlement negotiations is perfectly appropriate.
However, keep in mind that it is unethical to use frivolous accusations of bad faith claims by insurance companies as leverage in personal injury claim negotiations. It also violates your attorney’s ethical obligations to the Louisiana State Bar Association.
Compensation You Can Recover Through a Bad Faith Claim
Insurance company bad faith is a separate claim from your personal injury claim. If you win it, you will win the following amounts:
- The amount of your original personal injury claim, subject to insurance policy limits.
- Interest on any delayed payments.
- Consequential damages, such as additional medical expenses caused by the insurance company’s bad faith.
- Emotional distress (in some cases). It’s definitely worth a try.
- Punitive damages, in extreme cases.
Under certain circumstances, you might qualify for attorney’s fees, but perhaps not if you’re paying a contingency fee.
Hiring an Experienced Lafayette Personal Injury Lawyer Can Trigger an “Attitude Adjustment” That Is Likely To Increase Your Payout
The most common (and most dangerous) insurance company’s ‘back hat’ tactic is to discourage you from hiring a lawyer. Depending on how far they go, this alone may or may not constitute insurance bad faith. Either way, you shouldn’t fall for it unless the value of your claim is trivial or the defendant’s liability is uncontested.
Know this much, however. You might need to schedule a free initial case consultation at (337) 399-9000 with an experienced Lafayette personal injury lawyer at Kenny Habetz Injury Law to find out your claim’s true value. The insurance company’s attitude is likely to change in your favor once they learn that you’ve hired a good lawyer.
