Insurance can be an important, if not legally required, safety net for people facing unexpected emergencies. Ideally, an insurance company should pay you the value of a claim if it is covered by your policy. Unfortunately, many insurance companies do not play fair and deny claims for unreasonable or even illegal reasons. If you believe your insurance company has somehow deceived you, talk to a lawyer about filing a bad faith claim.
Bad faith claims take many forms. An insurance company might be liable for dealing in bad faith if it misrepresents the terms of your policy, causes unreasonable delays in resolving your claims, fails to investigate claims, and various other improper or unlawful practices. If this describes your situation, we should start gathering evidence immediately to build your case. Collect records of all your communications and messages with the insurance company and get a copy of your policy.
Call the Rhatigan Law Offices at (312) 578-8502 and ask our Illinois personal injury attorneys for a free review of your claims.
How to Tell if Your Insurance Company is Acting in Bad Faith in Illinois
Insurance companies are infamous for being difficult to work with. Their loyalty is usually to their bottom line first and customers second. Some insurance companies go so far as to engage in bad faith dealings to try and save money. Bad faith may include a whole host of improper claims practices, as described under 215 I.L.C.S. § 5/154.6, and you should speak to an attorney about your situation.
Misrepresentation
One example of bad faith dealings from an insurance company is misrepresentation. If an insurance company misrepresents the terms of a certain policy or provides misleading information to get someone to become a customer, it might be engaging in bad faith practices. Often, people do not find out they have been misled until they go to file a claim and are told their policy does not cover what they thought it covered. You might be misled to believe that your policy covers a broad spectrum of injuries, only to find out later that extremely specific factors must be present for your policy to cover anything.
Unreasonable Delays
When an insurance company receives a claim, it must respond and begin processing it as soon as possible. Exactly how much time an insurance company has to settle a claim may vary based on the nature of the claim. If an insurance company causes unnecessary or unreasonable delays, it might be dealing in bad faith. If you suspect as much, have our Aurora, IL personal injury lawyers look at your claim and policy to determine if the delay is indeed unreasonable.
Delaying a claim is a common strategy used by insurance companies to wait out customers. They often hope that claimants will tire of waiting and decide to cut their losses and move on, which means the insurance company never has to pay them. This is illegal and should be reported to your lawyer immediately.
Investigation Standards
Often, when a claim is very large or involves very complex facts, the insurance company may send its own investigators to gather more information. If an insurance company does not do its due diligence in investigating, this might be a sign of bad faith. Perhaps the insurance company does not want a thorough investigation because they are trying to stall or derail the claim. If you believe the investigation is lacking, talk to your lawyer about it.
Determining if You Have a Valid Claim for Bad Faith Insurance
Insurance claims are often denied, and it can be challenging to determine if the insurance company acted in bad faith or not. While you should get help from a lawyer if you suspect bad faith, there are some key elements to consider that may help you.
Legal Duty to You
First, we should consider what kind of legal duty the insurance company owed you. This duty may be spelled out in the terms of the insurance policy. Generally, it involves paying compensation for specific types of claims. If the insurance company does not fulfill the legal obligation they owe you, even though all the necessary conditions to trigger this duty have been met, you should contact a lawyer.
For example, your policy might state that your insurance company must pay for damage to your home caused by a fire as long as you did not start the fire, negligently or otherwise. This is the legal duty they owe you. If you experience this situation as described by your policy, the insurance company has a duty to pay.
Insurance Company’s Breach of Duty
Once you understand the legal duty the insurance company owed you, we should consider how they may have breached or violated this duty. This might happen in various ways, but perhaps the most common is wrongfully denying valid claims.
To continue with the fire example from before, if the insurance company claims that they do not believe the fire was accidental and refuse to pay, despite your overwhelming evidence to the contrary, they might have breached their duty. Denials like this are more common than people realize and tend to happen because insurance companies want to save money.
Harm and Damages
Another sign of a valid claim is harm and damages. We must be ready to prove that you experienced harm and incurred damages because of the insurance company’s bad faith. The fact that you were not paid compensation that you were legally owed might only be the tip of the iceberg.
In many cases, people incur additional damages because they were not compensated by an insurance company. They might have had to take out loans to cover costs and have racked up high interest fees. They might also be paying legal fees to challenge the wrongful denial.
What Laws in Illinois Apply to Claims Against Insurance Companies for Bad Faith?
Dealing with insurance is notoriously complicated, and various laws may apply to your case. Be sure to discuss this thoroughly with your lawyer, as insurance laws are known to fluctuate over time.
Unfair Practices Prohibited
Certain laws make the use of unfair or deceptive business practices illegal in the insurance world. According to 215 I.L.C.S. § 5/423(1), deceptive practices that may be considered bad faith dealings are illegal.
Unfair or deceptive business and insurance practices are defined according to § 5/424. The law here encompasses numerous offenses, including falsifying records, discrimination, and causing unreasonable delays in processing claims.
Notice Requirements
When an insurance company denies a claim, they are required to send the claimant an official notice explaining the denial. Not only should the noti9ce explain why the claim was denied, but it must also provide information about next steps available to the claimant. This may include informati0on about how to file an appeal and important deadlines.
If the insurance company does not send this notice, or the notice lacks key details, this is a huge red flag. Not only is this a legal violation, but it might indicate that the insurance company is trying to hide information from the claimant.
Evidence to Prove an Insurance Company Acted in Bad Faith in Illinois
Proving that an insurance company is dealing in bad faith requires a lot of evidence. Insurance companies often engage in bad faith practices in ways that are easy to cover up or excuse, making evidence of bad faith often hard to find.
Copies of Your Insurance Policy
Perhaps the most important piece of evidence in your case is your insurance policy. This is more than just a policy; it is a contract between you and the insurance company. The policy should contain all the terms and conditions that describe when and how the insurance company should cover you. In some cases, bad faith dealings are clear and obvious breaches of the policy.
Documentation
Next, we must work on gathering all documentation related to your claim. This, of course, includes the policy but also any other documents pertaining to your specific claim. When you filed your claim, you might have filled out forms and submitted them to the insurance company. Always keep copies of any documentation you send to the insurance company, as it might be useful to prove bad faith.
Electronic and Written Communications
We should also get copies of all communications between you and the insurance company. This may include letters sent and received in the mail, emails, records of phone calls, details of in-person meetings, and almost any other communications. This might be a lot to pull together, but doing so will help us create a clear and accurate picture of your claim and the bad faith dealings of the insurance company.
Damages You Can Recover in a Lawsuit for Bad Faith Insurance in Illinois
Damages in lawsuits for bad faith dealings by an insurance company are often largely based on the value of your insurance claim. For example, if you filed a claim worth $50,000 but the insurance company unlawfully denied it, your damages should include the value of the $50,000 claim. Depending on the situation, you may recover additional damages, too.
According to 215 I.L.C.S. § 5/155(1), you might be able to recover additional damages for attorney fees and possibly interest on your insurance claim. Depending on the actions of the insurance company, the court may allow you to claim legal fees, various other costs, and an amount of money not to exceed 60% of your other total damages, $60,000, or an excess amount related to a settlement the insurance company might have offered you previously.
What to Do if You Believe an Insurance Company is Acting in Bad Faith
If you believe your claim has been wrongfully denied or the insurance company is otherwise acting in bad faith, take the following steps to protect your legal rights.
Document Everything
Your first step should be to document everything that happens between you and the insurance company. Every phone call should be noted, and every email and letter preserved. Perhaps most importantly, you must save the denial letter if your claim was wrongfully denied.
You should also document all your costs you incur as a direct result of the insurance company’s bad faith dealings. It may be a good idea to record all your costs and review them with your lawyer to determine which ones you can claim in a lawsuit.
Hire a Lawyer
You should hire an attorney as soon as possible to assist you. Insurance companies often bank on claimants not seeking legal help when dealing with bad faith denials. Once they know you have a lawyer, they may change their approach and be more willing to pay to avoid a costly trial.
Review your policy with your lawyer right away. Your attorney should be able to determine if your policy truly covers your claim or if the insurance company has wrongfully denied you.
File a Complaint
Next, you and your lawyer should prepare and file a complaint against the insurance company. This may take time to prepare, as the complaint should thoroughly explain how the insurance company acted in bad faith and the evidence you have to support your claims. The sooner you get started, the better.
Contact Our Illinois Personal Injury Attorney to Discuss Your Insurance Claim
Call the Rhatigan Law Offices at (312) 578-8502 and ask our Chicago, IL personal injury attorneys for a free review of your claims.
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