Using Bad Faith To Get More Than What The Insurance Policy Insures

Let’s say that someone injures you in a car accident, and they are negligent or at fault. They injure you severely. However, the insured driver has a very small insurance policy—say, $10,000. Now, you have a problem, because you either will have to resolve the entire case for just the $10,000, or you will have to chase after the other driver individually for money.

Is there any way around this dilemma? There is one way (well, there are actually two; but one involves having already had uninsured motorist coverage, so let’s assume you don’t have that coverage).

Bad Faith

The way to get more from the insurance company than the amount the Defendant is insured for, is bad faith.

Insurance companies have an obligation to act in good faith when resolving and evaluating claims. They can have differing opinions than you. They can certainly ask for information or evidence about your case. They do not have to automatically believe you or offer you every penny that you want.

However an insurance company cannot just run you in circles, and it must make a good faith effort to resolve cases. So, for example, if someone were paralyzed, and there was no doubt the Defendant was liable, and there was only $10,000 in insurance coverage, the insurance company would almost always have to offer the full $10,000—there is no reasonable scenario where, given those circumstances, the value of the injury would be worth anything less than the full $10,000.

But sometimes insurance companies don’t act in good faith. They may ask for additional information, or give piecemeal offers to settle that are totally and completely insufficient given the circumstances of the case. And when they do that, a victim can sue the insurance company for bad faith.

Damages for Bad Faith

One huge benefit about a bad faith claim against an insurance company is that you can get, as damages, the full value of your injuries—regardless of the actual face value of the insurance policy.

It is not easy to show bad faith; the policy has to be small enough, your damages must be significant enough, and liability against the other side has to be pretty clear. On top of all that, the insurance company has to have dragged its feet in resolving the case, or offered too little to settle your case.

But if all that is present, your attorney will send a letter to the insurance company and the State of Florida, as is required by law, to give them a chance to resolve the case. If they do not, you can then proceed to sue the insurance company for the full amount of your damages.

It is somewhat rare to get a bad faith judgment against an insurance company—but it does happen, and when the Defendant is not fully insured, it can be an avenue to recovery that otherwise wouldn’t be available.

Contact the Miami property damage insurance attorneys at Velasquez & Associates P.A. to see what damages you may be entitled to after an accident.

Sources:

flsenate.gov/PublishedContent/Session/2012/InterimReports/2012-132ju.pdf

leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0624/Sections/0624.155.html