You carry different types of insurance to protect your financial and personal interests from loss, so you expect to be covered by the policy provisions in exchange for paying premiums. Unfortunately, not all insurance companies uphold their end of the bargain when their policyholders file claims. Insurers may fight or deny your claim for suspicious reasons, but New York insurance laws do prohibit certain forms of conduct. When a company violates the statute on unfair claim settlement practices, it could be subjected to a monetary penalty of $1,000 per offense as punishment for insurance bad faith.
However, a fine levied against the insurer does not compensate you as a policyholder when you sustain losses because of misconduct. Instead, you may have rights under insurance bad faith laws, which allow insureds to recover damages for wrongdoing by the insurance company. The team at Poltielov Law Firm P.C. is experienced with these cases, so we are ready to fight for your rights. Please contact us to schedule a free case review with a New York City insurance bad faith lawyer, and check out some important information about the laws.
What is Insurance Bad Faith?
An insurance policy is a contract between the insurer and policyholder, so the core of a bad faith insurance claim is breach of contract by the company. The key challenge is that misconduct by insurance companies is rarely outwardly obvious, and their tactics are designed to wrongfully deny, delay, or withhold benefits to protect their own bottom line. Therefore, you should be aware of the signs of insurance bad faith, such as:
- Delay tactics;
- Refusing to conduct a proper investigation;
- Repeatedly handing off your claim to different employees;
- Making threats; and,
- Failing to defend when someone files a lawsuit against you.
Bad faith insurance practices harm policyholders who rely on their coverage when they need it most. Insurance companies have a duty to act in good faith and fair dealing when handling claims. This means they must investigate claims thoroughly, respond to policyholders in a timely fashion, and pay valid claims without unreasonable delays. When an insurance provider fails to meet these reasonable standards, they engage in bad faith actions.
Common Examples of Bad Faith Insurance Practices
Bad faith practices take many forms. An insurance company might deny your claim without providing a clear explanation or evidence to support their decision. Some insurers offer a low settlement amount that does not reflect the true value of your claim. Others use delay tactics to avoid payment, hoping you will give up or accept less money.
Insurance companies sometimes fail to conduct a prompt investigation of your claim. They may request unnecessary documents repeatedly or ignore evidence you provide. These actions violate the duty of good faith and fair dealing that every insurance provider owes to its policyholders. When an insurance company acted in this way, you have the right to take legal action.
Types of Insurance Bad Faith Claims
Bad faith claims can involve many different types of insurance policies. First-party claims are when you file a claim with your own insurance company for coverage under your policy. This might include a car accident claim, property damage from a storm, or life insurance benefits after a loved one passes away. When your own insurer treats you unfairly, it hurts even more because you trusted them and paid insurance premiums for years.
Third-party claims involve situations where another person’s insurance company should pay for harm their policyholder caused you. For example, if someone causes a car accident that gives you a serious injury like a traumatic brain injury, their insurance company should compensate you. When that insurance company denies your claim or offers inadequate compensation, they may be acting in bad faith.
First-Party Insurance Bad Faith
First-party claim situations occur when you seek benefits from your own insurance policy. You might file a claim for medical expenses, lost wages, or property repairs. The insurance company should review your original claim fairly and pay what you deserve under the policy terms. When an insurance company failed to do this, it violated its duty to you.
New York’s bad faith insurance law recognizes that policyholders are vulnerable when insurers act improperly. You have already experienced a loss or accident, and now your insurance provider refuses to help. This double harm is why New York’s bad faith laws allow you to seek additional damages beyond what your original claim requested.
Third-Party Insurance Bad Faith
Third-party claim cases involve an insurer’s refusal to fairly compensate victims harmed by their policyholder. If another driver causes a car accident that injures you, their insurance company has a duty to investigate and pay your valid claim. When they engage in bad faith practices, they force innocent accident victims to suffer while they protect their profits.
Some insurance companies deliberately offer low settlement amounts to third-party claimants. They hope you will accept less money because you need it urgently. Others use delay tactics to drag out the process. These bad-faith actions violate common law principles that require insurers to treat claims fairly, even when filed by people outside their contract.
Recognizing Bad-Faith Insurance Actions
Insurance company misconduct is not always obvious. Many bad-faith insurance practices are subtle and designed to frustrate policyholders into giving up. You might notice the insurance company takes months to respond to your communications. They may request the same documents multiple times or claim they never received information you already sent. These unreasonable delays are signs of bad faith.
Another red flag is when an insurance company denies your claim without a thorough investigation. The law requires insurers to conduct a prompt investigation before making a claim denial decision. If they reject your claim quickly without reviewing all the evidence, they are acting in bad faith. An experienced bad-faith insurance attorney can review the insurer’s conduct and determine whether they violated their duty to you.
How Insurance Companies Try to Avoid Payment
Insurance companies use many tactics to avoid paying claims they owe. Some will misrepresent policy provisions to make you think you have no coverage for your loss. Others will focus on minor details in your claim while ignoring the bigger picture. They might blame you for the accident or suggest you caused your own injury to avoid compensation.
Delay tactics are particularly common. The insurance company knows that policyholders need money to pay bills and repair damage. By dragging out the claims process, they hope you will accept a low settlement just to end the ordeal. New York law requires insurers to handle claims promptly and pay valid claims in a timely fashion. When they fail to do this, they commit bad faith.
Compensation for Policyholders
In a successful bad-faith insurance case, you might qualify to recover the amount requested in your initial claim for coverage. When you have a valid claim, you should be paid in a timely manner according to the policy terms. Plus, you may be able to obtain damages for:
- Consequential costs that you would not have incurred if the insurance company complied with its contractual obligations;
- Emotional distress, in some cases where you suffered harm as a direct result of insurance bad faith; and,
- Punitive damages, which aim to punish the insurer for intentionally failing to pay a rightful insurance claim.
Additional damages in bad-faith cases help make policyholders whole. You may have lost wages because the insurance company did not pay your claim on time. You might have incurred debt or damaged your credit score. These consequential losses are the insurance company’s fault, and they should compensate you for them. An insurance bad faith lawyer will calculate all your losses to seek the full amount you deserve.
Punitive Damages in New York Bad-Faith Cases
Punitive damages serve an important purpose in bad faith insurance cases. Unlike regular compensation, which aims to restore your losses, punitive damages punish the insurance company for egregious conduct. New York courts award these damages when an insurer acts with malice or reckless disregard for policyholders’ rights. The goal is to deter bad faith practices and send a message to other insurance companies.
The amount of punitive damages depends on how severe the insurer’s misconduct was. Insurance companies that systematically engage in bad-faith actions may face larger awards. Your bad-faith insurance lawyers will present evidence of the insurance company’s conduct to show why punitive damages are appropriate in your case.
Why You Need a Bad-Faith Insurance Attorney
Bad-faith insurance claims are complex and require specialized knowledge of insurance laws. Insurance companies have teams of lawyers and adjusters working to minimize what they pay. You need an experienced bad faith insurance attorney on your side to level the playing field. Our legal team understands the tactics insurers use and knows how to counter them effectively.
A New York City insurance lawyer will gather evidence of the insurance company’s misconduct. This might include reviewing all correspondence, examining how the insurer investigated your claim, and identifying violations of New York insurance laws. Your attorney will build a strong case showing the insurance company acted in bad faith and should pay what you deserve.
How Our Law Firm Helps Bad Faith Victims
Our law firm has helped many clients who were mistreated by insurance companies. We know how to investigate bad faith claims and hold insurers accountable. Our experienced attorneys will review your policy provisions, examine the insurance company’s actions, and determine the best strategy for your case. We fight aggressively to protect our clients’ rights and obtain maximum compensation.
The law offices of Poltielov Law Firm P.C. handle all types of insurance bad faith cases. Whether you are dealing with claim denial, low settlement offers, or unreasonable delays, we can help. Our legal team has the knowledge and resources to take on even the largest insurance companies. Having an insurance bad-faith attorney can make all the difference in the outcome of your case.
Frequently Asked Questions About Insurance Bad Faith
What are signs that my insurance company is acting in bad faith?
Common signs include unreasonable delays in responding to your claim, denying your claim without explanation, requesting the same documents repeatedly, offering a low settlement that does not match your losses, and failing to investigate your claim properly. If your insurance company misrepresents policy provisions or threatens you, these are also signs of bad faith. Any time an insurance provider treats you unfairly or fails to uphold their duty of good faith and fair dealing, you should contact an insurance bad faith attorney to review your situation.
How long do I have to file a bad-faith insurance claim in New York?
The time limit for filing a bad-faith claim in New York depends on the type of claim and when the bad faith occurred. Generally, you have six years from the date of the breach of contract to file a lawsuit. However, some cases may have different deadlines depending on the circumstances. Because these deadlines are strict, you should contact a New York bad faith insurance lawyer as soon as you suspect bad faith practices. An attorney can review your case and ensure all paperwork is filed on time.
Can I sue my insurance company if they denied my claim?
Yes, but only if the claim denial was improper. Insurance companies have the right to deny claims that are not covered under your policy or that lack sufficient evidence. However, if the insurance company denied a valid claim without proper investigation, misrepresented your coverage, or violated policy provisions, you may have a bad faith insurance claim. An insurance bad faith attorney can review your policy and the insurer’s conduct to determine whether the denial was wrongful.
What compensation can I receive in an insurance bad faith case?
You can receive the benefits that should have been paid under your original claim. You may also recover additional damages for consequential losses caused by the insurance company’s bad faith, such as lost wages, debt, or damaged credit. In cases where you suffered emotional distress because of the insurer’s conduct, you might receive compensation for that harm as well. New York courts can also award punitive damages to punish insurance companies for particularly egregious bad faith actions. An experienced insurance bad faith lawyer will calculate all damages you deserve.
How much does it cost to hire a bad-faith insurance lawyer?
Most bad-faith insurance lawyers work on a contingency fee basis, meaning you pay nothing upfront. The lawyer only receives payment if they win your case, and their fee comes from a percentage of your recovery. This arrangement allows policyholders and accident victims to afford quality legal representation without worrying about hourly rates. During your free consultation, your attorney will explain exactly how their fees work and answer any questions you have about costs.
Assistance with Insurance Bad Faith Claims
Our New York insurance bad faith attorneys at Poltielov Law Firm P.C. will guide you in pursuing legal remedies. Many cases settle by agreement, and we are aggressive in negotiating a fair amount that will fully cover your losses. However, we are prepared to take your case to court if the insurer refuses to pay sufficient compensation.
Our attorneys have extensive experience with New York bad faith law and understand what it takes to win these cases. We will gather evidence of the insurance company’s misconduct, consult with experts when needed, and build a compelling case for why you deserve full compensation. Our legal team handles all aspects of your bad faith claim so you can focus on your recovery and getting your life back on track.
Set Up a Consultation with a New York Insurance Bad Faith Lawyer Today
For additional details and personalized advice, please contact Poltielov Law Firm P.C. or call us now at 718-880-2911 to set up a no-cost consultation with a New York bad faith insurance attorney. We can explain how the laws apply to your case after learning more about your situation. Our law firm offers a free consultation to all potential clients, and we will review your insurance policy, the insurance company’s actions, and your options for recovering the compensation you deserve. Do not let an insurance company take advantage of you. Contact our law offices today and let our experienced attorneys fight for your rights.