You have a loss. There’s an insurance policy, and you expect the insurance company to pay on the policy. However, you’ve heard that insurance companies don’t always do the right thing.
As you try and process your claim, your suspicions are confirmed. The insurance company won’t pay you fairly for covered losses.
At this point, you may start thinking about a bad faith insurance claim. It’s important to know what it is, what it can do for you, and how to proceed.
What Is a Bad Faith Insurance Claim?
A bad faith insurance claim is a legal claim against an insurance company for failing to timely pay benefits of a policy. When a person has a covered loss under an insurance policy, they have a right to expect timely processing and payment. When the insurance company doesn’t pay the claim fairly without a good reason, they are acting in bad faith. A bad faith insurance claim allows the victim to recover compensation for their losses and damages relating to the bad faith.
The Law for Bad Faith Insurance Claims in South Carolina
South Carolina Code § 38-59-20 lists a number of actions that constitute improper claims practices when committed without just cause and performed with frequency to indicate a general business practice. In addition, other practices that amount to an unreasonable delay or failure to pay a claim may constitute bad faith insurance practices.
What Can You Receive in Damages for a Bad Faith Insurance Claim?
In a bad faith insurance claim, you want the insurance company to pay the policy proceeds that they’re unreasonably withholding. However, that’s only one category of damages that you may receive in a bad faith insurance claim.
Damages that you can receive in a bad faith insurance claim are:
- Actual damage: The unrealized amount of the policy proceeds that you should have received through the insurance claim
- Consequential damages: Extra losses that you incur because of the delay in payment. If the insurance company failing to pay causes you extra expenses and losses, you may ask for compensation in addition to the withheld payment from the policy
- Punitive damages: To receive punitive damages, you must show that the insurance company acted willfully or recklessly in withholding payment
- Attorney fees: The insurance company may be required to pay the reasonable cost of the plaintiff bringing the legal action
Review all the ways that you have suffered financial harm because of the insurance company’s actions. In general, these losses may be included. Punitive damages do not compensate you for specific losses bur rather serve as a punishment and deterrent to the insurance company for their conduct.
Can Attorneys’ Fees Be Claimed as Part of a Bad Faith Insurance Claim?
Under South Carolina Code § 38-59-40, a suit based on refusal of an insurer to pay a claim in bad faith may include reasonable attorney fees for the prosecution of the case. The judge determines the amount of fees to be awarded. It may not exceed one-third of the amount of the judgment. Additional fees may be awarded if the judgment is affirmed on the defendant’s appeal.
Is an insurance bad faith claim the same as an internal appeal?
No. An insurance bad faith claim is not the same thing as an internal appeal. In an internal appeal, you’re bringing the case within the insurance company to ask for another review. They decide themselves whether to pay the claim.
With a bad faith claim, you’re taking the case to court. It’s out of the insurance company’s hands, and a neutral third party decides if the insurance company acted in bad faith. A bad faith claim can be a beneficial course of action when the insurance company refuses to meet their obligations and fairly pay a claim.
Bad Faith Insurance Claims Lawyers
At Bannister, Wyatt & Stalvey, LLC, our lawyers are committed to the highest ethical standards of unquestionable integrity for each client. We believe in holding insurance companies accountable for fairly paying their claims. If you have been denied a fair payment on an insurance claim, we invite you to contact us to see how we can help you with a bad faith insurance claim.