Alabama Insurance Bad Faith Lawyer

What is insurance bad faith?

In the United States, individuals that have been victimized by the bad acts of their insurance company have the option to pursue a tort claim. This area of the law is known as "insurance bad faith." In most jurisdictions, it remains that insurance companies owe their customers a duty of good faith. This means that an insurance contract will automatically act as proof of their promise to deal fairly and honestly.

Should they subsequently fail to uphold this responsibility to the policyholder, that person would have grounds to pursue damages—which could exceed the original value of the existing policy. In the state of Alabama, one may pursue an insurance bad faith claim in either a first party or third party context.

Understanding First Party vs. Third Party Claims

In the context of a first party relationship, one must be able to prove that their insurance provider has offered to cover damages for a specific type of property (i.e. an automobile or a home). This would mean that the insurance company has offered to investigate all such claims, as well as to pay the policyholder the appropriate value for their damaged property. Insurance bad faith may occur if they subsequently fail to conduct a proper investigation of the damage or even acknowledge that a claim has been filed in the first place. This may also apply in cases involving health insurance or life insurance, but these instances are very rare.

In the context of a third party claim, one must be able to prove that they had purchased liability insurance. Should the insurance provider fail to adequately defend a lawsuit and/or pay a judgment to cover the cost of the lawsuit, it could be proven that they have not acted in good faith. Additionally, the default rule is that they must also cover all costs associated with one's defense—regardless of the actual limit of coverage. This area of the law can be quite complex, however, so it is highly recommended that you discuss the circumstances of your case with a Dothan personal injury lawyer before taking any action against your insurance provider.

How common are bad faith lawsuits in the U.S.?

Bad faith lawsuits are, surprisingly, not rare in the United States. In fact, it has been reported that about half of the toxic mold cases that were filed in 2001 were pursued against insurance companies on the grounds of bad faith. These cases had been previously uncommon, and those that had been pursued were usually resolved with relatively low payouts, but this has since changed. In the last decade or so, there have been several notable cases in which the victims of insurance bad faith were awarded tens of millions of dollars in damages. For this reason, you should not hesitate to pursue a claim if you believe that you have been wronged by your insurance provider.

Consult with a Dothan Injury Attorney Today

Think that you have a valid insurance bad faith claim? If so, we encourage you to get in touch with a Dothan personal injury attorney at Morris, Cary, Andrews, Talmadge & Driggers, LLC as soon as possible. Our lawyers have earned extensive recognition for their work in the field of personal injury law, including membership in the Multi-Million Dollar Advocates Forum, so you can rest assured that our firm is well-equipped to represent your case. To learn more, simply pick up the phone and give us a call at (888) 694-0174 for a free initial consultation.