INSURANCE BAD FAITH
“Insurance bad faith” is the phrase that describes the type of claim you have against your insurance company for wrongfully delaying or denying your claim. Under Mississippi law, your insurance company owes you (as the policy holder) a duty of good faith and fair dealing.
Sometimes insurance companies don’t handle your claim in good faith and refuse to deal with you fairly. When that happens it may be necessary for you to file a lawsuit against your insurance company in order to recover the insurance benefits that you paid for.
What is “Bad faith”?
Insurance “bad faith” occurs when your insurance company wrongly delays or refuses to pay for a covered claim. Insurance “bad faith” can also occur if your insurance company wrongly refuses to defend you if you are sued, or if your insurance company refuses to pay for a covered judgment against you.
Examples of Insurance “Bad Faith”
A common example of insurance bad faith occurs with homeowner’s insurance claims. With homeowner’s insurance, you pay a premium and the insurance company promises to timely pay for any damage or loss to your covered property. When you have a fire or theft loss, your insurance company is contractually required to promptly investigate the claim, promptly determine whether the damage is covered, and promptly pay the right amount due under the policy. Bad faith occurs when the insurance company delays payment of the claim by prolonging the investigation and/or wrongly denying the claim. Bad faith can also occur if the insurance company pays less than what is actually owed under your policy.
If your insurance company acts in bad faith, then punitive damages and attorney fees may also be recoverable.
The duty to defend
Under most insurance policies your insurance company has a duty to defend you when you are sued. An insurance company can commit bad faith if it fails to provide you with a full and complete defense to a covered claim without a legitimate and arguable reason.
The Duty to indemnify/settle
Your insurance company has a duty to pay for damages and losses that are caused by your own negligence. The duty to indemnify exists only to the extent that the final judgment is for a covered act or omission. Insurance bad faith can occur if the insurance company wrongly refuses to pay a covered judgment.
Your insurance company also has a duty to make reasonable attempts to settle any covered claim. Insurance bad faith can occur if the insurance company wrongly fails to settle a covered claim thereby exposing you to an uncovered financial loss.
Do You Need a Lawyer?
If you have been sued, your insurance company will hire one of its lawyers to defend you in the lawsuit. The insurance policy specifically allows it to pick your lawyer because the insurance company is responsible for paying all legal defense costs. In most situations, there is no problem with allowing yourself to be represented by the lawyer chosen by the insurance company.
In most cases, your interests and the interests of the insurance company are the same. However, there are situations where you should retain your own lawyer. If you have any concern about the skill and competence of the insurance lawyer, or if you have any concern that the amount of insurance may not be sufficient to cover all of the claims, you should retain your own lawyer who will put your interests first.
In certain limited situations you may also have the right to have your insurance company pay for a lawyer of your own choosing.
Experienced Insurance Lawyers
Our lawyers have the experience and knowledge to handle the most complex insurance claims and issues. If your insurance company has wrongly delayed or denied payment of a valid claim, then you need the help of an experienced insurance lawyer. We welcome the opportunity to discuss your legal options with you.
To set up an initial consultation, contact us online or call 601-957-3101. Our office is conveniently located in downtown Jackson, Mississippi, just off I-55. Parking is available behind the building.