What is a bad faith claim?

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In the insurance world, you may have heard the term “bad faith claim,” but do you know what it actually means and how it could affect any pending insurance claim you may have?  

An insurer has a legal duty to act in “good faith” when handling claims, which means that it must conduct a fair and prompt investigation of those claims, and it must also take reasonable steps to settle them. When the insurer decides to take certain action or no action that conflicts with its duty, without a reasonable or justifiable excuse, it is usually considered to be acting in “bad faith,” and you may be able to recover additional damages.

Your right to recovery from a “bad faith” claim partially depends on your relationship with the insurer. Your insurance policy is a contract between you and your insurance company, which creates duties for both of you. For the insurance company, a legal duty is imposed upon the insurance company to act in good faith when handling any claim that you file with it (e.g. property damages under your collision coverage, medical bills under your policy’s medical payment coverage, losses filed under your uninsured motorist coverage,  & etc.)..

When you do not have a contractual relationship with the insurance company handling your claim, the duty of good faith in your favor does not exist. That is the case when you file a claim against an insurance policy that does not provide coverage to you. For example, if you are involved in an accident with another driver who is at fault, you must initially file your claims against the other driver’s insurance policy. Because you are not a named insured/covered under that policy, there is no contractual relationship between you and the insurance company who issued that policy. Therefore, the insurance company has no duty to act in good faith when handling your claim. In fact, has the right to take action adversarial to your claim.

Louisiana law lists a number of things that insurance companies do — or don’t do — that are considered bad faith, which are:

  1. Misrepresenting important facts or insurance policy language that relates to the insurance coverage at hand.
  2. Failing to pay a settlement within thirty days after the settlement agreement is put in writing.
  3. Denying coverage or attempting to settle a claim using information from an insurance application that the insurance company knows has been altered, but did not tell their insured about or try to get his/her consent to take that action.
  4. Misleading a claimant about the length of time that person has before he/she has to file a lawsuit to preserve a claim.
  5. Failing to pay any amount of its insured’s claim within sixty days after insured provides proof of his/her losses, when such failure is arbitrary, capricious, or without probable cause.
  6. Failing to pay other claims listed under Louisiana law in a manner that is arbitrary, capricious, or without probable cause.

Can you get damages from a bad faith claim?

If you are able to prove that the insurance company has acted in bad faith, some of the additional damages you may be entitled could include:  

  • Enhanced Compensation – An enhancement by the court of the monetary sums that the court found was owed to you in damages prior to the insurance company’s bad faith. For example, the court may determine that the $100,000 that you were already owed, should be increased by 20%, bringing your claim for those damages to $120,000.
  • Attorney fees;
  • Excess Judgment – Award in damages over and above the recovery limits that the insurance company would have enjoyed in the absence of its bad faith;
  • Interests – award of interest on amounts in penalties that the court is imposing against the insurance company due to its bad faith; and
  • Additional Amounts – Any other amounts in damages and penalties that the court may decide to impose against the insurance company.

Bad faith claims are often very difficult to prove. That’s why those claims should be handled by an experienced car accident attorney who is knowledgeable of the Louisiana bad faith laws. If you or someone you love believes you are falling victim to an insurance company’s bad faith handling of your automobile accident claims, contact Danny Russell’s office today.

****Information furnished herein is only general and not a substitute for personalized legal advice.

 

What To Do Following a Flood

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1.     Report Your Loss to Your Insurance Company:

If a flood caused damage to your property, you need to immediately call your homeowners or renters insurance company to report your losses. You will need to have the following information available:

  1. Your policy number and
  2. A phone number and/or email where you can be reached at all times.

It is important that you make immediate contact with your insurance company as most, if not all, flood insurance policies require that you make prompt written notice of your loss. Once you get an agent on the phone, he/she will tell you how to file your notice of loss. If you are not provided with that information, you must send a written notice of loss to your insurance company referencing your policy number.  

Within a few days, you should be contacted by an insurance adjuster. If not, contact your insurance agent or an insurance representative. While you have that person on the phone, ask for his/her name and contact information, then request an entire copy of your insurance policy, along with your declaration of coverage.

2.     Account for All Damaged Property/Losses

The person adjusting your claim will need evidence of your losses, so you need to do the following:

  1. Make a list of all damaged or lost items with their values, serial numbers (if any), brand names, model, where they were purchased, and their costs.
  2. Make a list of all items that were not damaged.
  3. Take photographs of each damaged item on your list.
  4. Take photographs of the standing floodwater levels.  
  5. Gather receipts or other documentation establishing the values and dates of purchase for each damaged item.

Don’t throw away any of the damaged items before an adjuster has evaluated it, unless officials require you to do so. If you are required to do so, take any samples of the damages items that you can, such as carpet, wood from the structure, sheetrock, and others.  

3.     Complete & File a “Proof of Loss”

Your adjuster should be able to provide you with the appropriate proof of loss document to be completed. The proof of loss must be filed within 60 days of the flood, which is required before any claim can be paid out. Once that is filed, you should receive a settlement offer for the payment of your losses. If you accept the offer, the insurance company will send you a check in the amount of the offer you accepted. If you reject the offer and cannot form an agreement with the insurance company, you may need to hire an attorney as there are certain time limitations for filing property damage claims with the courts.

What If I Don’t Have Flood Insurance?

If you don’t have flood insurance, you should immediately file an application for assistance with FEMA by visiting https://www.disasterassistance.gov/ or calling 1-800-621-3362.

Selecting a Contractor to Rebuild or Perform Repairs

Before hiring and paying a contractor to rebuild or perform repairs, I strongly suggest that you research whether the contractor is properly qualified, licensed, and insured. You can perform a search by visiting the following website, which provides some of that information: http://www.lslbc.louisiana.gov/contractor-search/. Additionally, ask the contractor to provide you with proof of insurance and addresses to properties that he/she performed work on in the past. If the owner of the properties allows, you may want to take a look at that property before hiring the contract to examine the quality of his/her work.

By:       Danny Russell, Baton Rouge area insurance litigation attorney, licensed in Louisiana.

Danny Russell is a Baton Rouge lawyer who has experience dealing with the insurance companies and evaluating his clients’ damages. If you have suffered property damage as a result from the recent floods in Louisiana, call the Russell Law Firm. We will contact your insurance company and demand that they make payment for your damages.

****INFORMATION FURNISHED HEREIN IS ONLY GENERAL AND NOT A SUBSTITUTE FOR PERSONALIZED LEGAL ADVICE.

Flood Insurance Policies – Know Yours

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I believe that I speak for most in the Baton Rouge and Acadiana areas when I say that these recent storms and the resulting flooding has completely taken me by surprise. The photos on Facebook of flooding are devastating.

If your property has been damaged due to these floods, I highly suggest that you call your insurance company and ask for a copy of your homeowner’s or renter’s insurance policy so that you can determine whether you have the appropriate flood coverage. You are only covered up to the policy limits that you selected for your policy, and, unfortunately, if any losses exceed those limits, you may have to pay out-of-pocket for the repairs to your home and replacement of your belongings. Therefore, it is very important to immediately review the terms of your policy so that you can begin to plan how to repair whatever damages you have sustained.

Many flood insurance policies provide the following coverage limits/maximum amounts that you can claim for payment of whatever flood-related damages you have sustained:

Coverage Type                                                          Coverage Limit

One to four-family structure                                       $250,000

One to four-family home contents                              $100,000

Other residential structures                                         $500,000

Other residential contents                                           $100,000

Business structure                                                       $500,000

Business contents                                                        $500,000

Renter contents                                                           $100,000

Flood insurance protects two types of insurable property: building and contents. The first covers your building, while the latter covers your possessions; neither covers the land they occupy. Building and contents coverage usually includes the following, but you need to see what your particular policy provides:

Building coverage usually includes:

  • The insured building and its foundation
  • The electrical and plumbing system
  • Central air conditioning equipment, furnaces, and water heaters
  • Refrigerators, cooking stoves, and built-in appliances such as dishwashers
  • Permanently installed carpeting over unfinished flooring

Contents coverage usually includes

  • Clothing, furniture, and electronic equipment
  •  Curtains
  • Portable and window air conditioners
  • Portable microwaves and dishwashers
  • Carpeting that is not already included in property coverage
  • Clothing washers and dryers

If you purchased your flood insurance policy through the National Flood Insurance Program, you may have a maximum coverage of $250,000 for property damage to the home and $100,000 for contents/personal belongings in the home. However, those coverages must have been purchased separately, and any excess coverage has to have been purchased by private insurance providers.

Lastly, it is important to note that most policies do not go into effect until 30 days after you purchase them. If you are unsure about whether or not your policy is active, call your local agent.

If you have any additional questions related to this topic and your circumstances, please feel free to contact the Russell Law Firm.

By:       Danny Russell, Baton Rouge area insurance litigation attorney, licensed in Louisiana.

Danny Russell is a Baton Rouge lawyer who has experience dealing with the insurance companies and evaluating his clients’ damages. If you have suffered property damage as a result from the recent floods in Louisiana, call the Russell Law Firm. We will contact your insurance company and demand that they make payment for your damages.

****INFORMATION FURNISHED HEREIN IS ONLY GENERAL AND NOT A SUBSTITUTE FOR PERSONALIZED LEGAL ADVICE.