10 Apr Insurance Bad Faith & Your Rights: FAQs (Pt. 2)
Resuming Insurance Bad Faith & Your Rights: FAQs (Pt. 1), here, we will continue to respond to some common questions regarding insurance bad faith practices.
Insurance Bad Faith & Your Rights: More Important Answers
Q – Who is sued in insurance bad faith cases?
A – The insurance company that has acted in bad faith towards you is typically the party named as a defendant in a bad faith lawsuit (i.e., is the party being sued). Here, it’s important to point out that such bad faith cases will involve an insurer with whom you have a policy – and not another party’s insurance company.
In the event that you have been the target of bad faith practices from some other party’s insurer (such as in the case of another driver’s insurance company after a car accident), you may still be able to hold these companies accountable for their bad faith actions by pursuing an insurance bad faith per se case.
Q – Why do insurance companies act in bad faith?
A – Usually out of financial motivations to protect/preserve their own profits. In particular, when insurers deny valid claims, they make no or far less pay outs to policyholders. In many cases, unfortunately, policyholders may not even realize that:
- They have been the subject of bad faith practices.
- They have a right to appeal these denials and fight for the compensation to which they may be entitled.
This, ultimately, means that insurance companies that act in this manner can retain more money.
Q – What type of compensation is available in insurance bad faith cases?
A – Arizona law provides for two types of compensation in bad faith cases, with these being:
- Economic damages – Also referred to as compensatory damages, this type of compensation will include the benefits/payouts a policyholder was entitled to per his claim/policy.
- Non-economic damages – Also referred to as punitive damages, this type of compensation refers to the awards granted to plaintiffs in an effort to punish defendants for their bad faith actions.
Although punitive damages may not be available in every case, they:
- Tend to be an option when an insurance company has a pattern of acting in bad faith
- Can be powerful leverage when negotiating with insurers, as the possibility of punitive damages can compel insurers to try to resolve their claims prior to trial (instead of risking a loss and having to potentially pay thousands, if not more, in these damages).
Be sure to look for the final installment of this blog series for some more important info about insurance bad faith and your rights.
Phoenix Personal Injury Lawyer at the Law Office of Richard Langerman
Have you been the target of insurance bad faith practices? If so, it’s time to contact an experienced Phoenix personal injury lawyer at the Law Office of Richard Langerman.
For more than 25 years, our attorneys have been representing clients and aggressively defending their rights both inside and outside of the courtroom against defense attorneys, corporate lawyers and insurance company agents alike.
To find out more about how we can help you, set up a free, no obligations initial consult with our Phoenix personal injury lawyer today. You can set up this meeting by calling us at (602) 240-5525 or sending us an email using the contact form at the bottom of this page. From our offices in Phoenix, we provide superior legal services and representation to clients throughout the state of Arizona.