If you were injured by another person due to their negligence, then their insurance company may responsible to pay for your injuries. Insurance companies have an “implied covenant of good faith and fair dealing” with their clients. If an insurance company fails to act in good faith, you have the grounds for a bad faith insurance lawsuit. If this happens to you, hire an experienced insurance attorney. They can help you pursue a third-party bad faith claim against the insurance company.
What Is An Example Of Bad Faith Insurance
You may have a bad faith insurance case if:
- Your insurance claim was denied, yet you were not given an adequate reason
- The insurance company undervalued or denied your claim. This occurred after failing to suitably investigate your damage
- The insurance company inaccurately represented their own policy to minimize the cost of your claim
- They took an unreasonable length of time to pay your claim
It is also possible for Bad Faith lawsuits to occur against an insurance company in a defendant in personal injury case. If the insurance company is obligated to defend a policyholder from a liability lawsuit and they fail to meet their duty to the policyholder, the policyholder may be able to file a bad faith insurance lawsuit against the insurance company.
What is a Stowers Demand?
The Stowers doctrine governs many Texas Bad Faith insurance claims. This doctrine applies when your damages exceed the defendant’s insurance policy limits.
To follow the Stowers doctrine, your insurance attorney would start by sending a Stowers demand letter. This letter is sent to the insurance company, and must include:
- Include a demand for compensation within the policy limits
- State clear terms for accepting the demand
- Provide a reasonable amount of time for the insurance company to respond
- Demonstrate that any subrogation claims and hospital liens have or will be resolved with the proceeds from the settlement
- Offer to release the defendant from further liability.
If the insurance company rejects your Stowers demand, your next step is to go to court.
Do You Have A Legitimate Insurance Bad Faith Claim?
Not every claim denial rises to the level of bad faith. There are legitimate situations where your policy may not cover the type of damage caused. If you are in question, then review your insurance policy. These policies are typically long and complicated. They are loaded with many clauses to try to limit their liability.
If you believe you are the victim of bad faith insurance, you need to speak with an expert insurance attorney.
Insurance Lawsuits Settlements
Lawsuit settlements in bad faith insurance cases are based on details. It is possible that your settlement could be above your original claim amount. Damages can be complicated in these lawsuits. One reason for verdicts above the policy limit is due to common law punitive damages.
The punitive damages in a bad faith insurance suit are different than what commonly is offered in a personal injury case. In most personal injury cases, the goal is to make the injured party financially whole. However, in a bad faith insurance case that is not the only goal. There is also the goal on making good on the “implied covenant of good faith and fair dealing”. Nearly everyone has some type of insurance, and people need to be able to rely on their insurance to be there when the unexpected happens.
If you win a jury verdict for greater than the policy limit, then you may be able to make the insurance company pay the extra damages by bringing a third-party bad faith claim.
The defendant is typically on the hook for damages in over the policy limit. Therefore, the defendant is the one who would have a bad-faith claim against their insurance company.
However, you can get a court to issue a turn-over order. This requires the defendant to give you their cause of action. This allows you to try to collect against the insurer.
Is there a reason to settle even if my damages are greater than the policy limit?
Sometimes, even if your damages are greater than the policy limits it makes sense to accept the settlement. The reason is that there is nothing that requires and insurance company to pay more than their policy limit. Anything above the policy limit comes from the defendant. Most defendants simply don’t have the assets to pay off large verdicts. Thus, you could struggle for years to recover that money.
The defendant also has a motivation to settle within the policy limits. Doing so helps them avoid the risk of having a personal judgment against them. Such a judgment can lead to wage garnishment and liens on their assets that can follow them for years. This is why an insurer must accept a Stowers demand where liability is reasonably clear.
With a Stowers demand, you can reach a settlement with the insurance company that gets you your money right away. You won’t have to spend years of uncertainty waiting for a jury verdict while struggling to pay your bills.
Talk To An Insurance Attorney Today!
At Kirkpatrick Law we are here to fight for you. We now you have been through a lot. Allow us to help you settle your insurance claim dispute. Give us a call at 713-893-0305 Today!