In today’s video blog post, we continue to discuss Bad Faith claims.  Bad Faith claims against an insurance carrier can be the “great equalizer,”  leveling an otherwise unequal playing field between insurer and policyholder.  However, it is not always enough to know that the law of most states recognize that an implied covenant of good faith and fair dealing in every insurance contract.

Maximizing Bad Faith Recoveries

Maximizing bad faith recoveries requires in an depth knowledge of the complexities and differences of each state’s bad faith laws.  Different states recognize different types of bad faith claims, impose different conditions on bringing bad faith claims, and afford different bad faith damages.  In order to maximize the strength of a potential bad faith claim, it is critical for coverage counsel to identify all potentially applicable states’ laws, know the types of bad faith claims recognized under those states’ laws, and evaluate the entirety of the insurer’s conduct.

Because of the intricacies of bad faith law, and the complexities involved in choice of law analysis, it is important to hire coverage counsel who not only understands bad faith law, but who also has experience and success at litigating bad faith claims.  Having analyzed and litigated bad faith claims in numerous jurisdictions, Miller Friel has the experience to integrate bad faith into an overall recovery strategy, and use bad faith as a tool to maximize recovery.  See Miller Friel Case Resolution.

To learn more about how we have used integrated bad faith strategies to drive insurance recovery settlements, please give us a call at 202-760-3160.

If you prefer to read the transcript of the video, here it is below:

Bad-faith causes of action vary from state to state. Choice of law is important.

Bad-faith causes of action vary from state-to-state. States recognize bad faith causes of action in varying degrees, different types of bad faith. The conduct that is required to constitute bad faith, the damages recoverable for bad faith conduct which can range from economic damages to tort damages to punitive damages. So it’s important to first evaluate what state law applies. As a firm we have successfully pursued bad faith claims and a number of jurisdictions on behalf of the number of clients.

For example one state would be Arizona which is a state’s law that I’m familiar with because of a large client that is headquartered there. Arizona law is particularly strong on insurer bad faith because it recognizes independent causes of action in the three stages of what I like to think of the insurer relationship, underwriting, claims handling an investigation and claim evaluation.

With respect to underwriting, it recognizes bad faith causes of action for any misrepresentation or omissions that the insurer may make in the underwriting process, that may give the policyholder a false sense of what coverage they are purchasing or what their insurance policy may cover.

Second is when an insurer conducts a bad faith investigation. Which is independent cause of action from whether or not the insurer wrongfully denies coverage or breaches the contract examples would include a dilatory claim evaluation, an inadequate claim evaluation, not act asking the questions it should be asking or not investigating the facts that it should be investigating or through even and overburden some claims investigation where the insurer inundates the policy holder with unnecessary and irrelevant questions, document requests, and inquiries.

And third is the more traditional obvious bad faith denial of coverage where the insured does not have a reasonable basis to deny coverage and denies coverage anyway.