What the Insurance Company Lawyer is not telling you, and What You Need to Know.
When you buy car insurance, you are buying an insurance contract. That contract requires you, the insured, to pay money to an insurance company in exchange for a promise from the insurance company to pay up to a certain monetary limit when some covered event occurs. The insurance company is agreeing to cover or take the place of their insured who suffers a loss. If you are in an accident, you let your insurance know about the claim so that they can investigate the accident to determine liability and coverage. If you caused the accident and hurt the other person, that person will likely make a monetary demand to your insurance company.
What are the benefits you get when you purchase an insurance policy?
If you are being sued for causing an accident and injuries, you can be facing a contentious and long lawsuit, coupled with a ton of expenses. Your insurance policy benefits include paying dollar amounts (up to the money limits stated on your declaration page) and include defense related costs for any liability claim. Included with the insurance policy agreement is a duty or obligation on the insurance company to handle the accident claim. They have a duty to defend the lawsuit, that begins with an adequate investigation as to liability and damages. Included in that duty to defend is an obligation to settle cases when the evidence suggests that you are liable. You are relying on the insurance company and their hired defense lawyers' expertise and experience. As a result, they also owe you a fiduciary duty to be trustworthy in handling the claim. You are counting on them to effectively manage the litigation while looking for opportunities to settle and minimize your exposure to being liable for big money verdicts. That is why you bought the policy, and continued to make the premium payments.
Insurance Company's Duty of Good Faith and Fair Dealing
The insurance company has a duty to timely investigate and evaluate any claim, and communicate what they have learned to their client. Those communications need to inform their clients of the probabilities of liability for causing the accident and damages that the client could be exposed to if the case goes to trial. They also have an obligation and duty to continually inform their clients of any and all developments affecting the settlement of claims against their insured. Both the insurance company and the insured client should be discussing whether the insured client wants to contribute money in addition to the policy limits to settle the case and pay the demands if needed. The insurance company's failure to sufficiently communicate could be actionable if the insured missed an opportunity to help settle the claim before the judgement at trial.
Did the Lawyer for the Person you injured in the Car Wreck Make a Demand on your case?
Often times we find that a person we have sued has no idea of why the case has not settled or why they are now facing a deposition and a possible trial. In addition to a long and uncomfortable deposition, you know that the lawsuit for the accident that you caused could end up costing you a lot of money. Expenses related to accident injuries and necessary medical treatment for both now and the future may be well in excess of the policy limit amount when you purchased your insurance policy. As a result, you need to find out if you will be on the hook for dollar amounts beyond your policy limits on you declaration page. Find out if you will you be losing your home or the college fund for your kids and grandkids? Most lawyers in most cases will not be interested in wrecking your personal financial future, wanting to only seek recovery under the insurance policy limits.
One thing to ask is whether the lawyer on the other side made any attempt to settle only for the insurance policy limits, thereby agreeing to not expose you personally to any financial loss. If you find out that the lawyer suing you has not made a policy limits demand, you should ask your insurance company to reach out and settle the case for policy limits. If you learn that the lawyer for the person you injured in a car accident did offer to settle for the policy limits but the insurance company has kept your financial future on the line by refusing to settle, you may need to hire your own lawyer and see if the insurance company is acting in good faith or exposing you to liability in bad faith by denying or delaying legitimate settlement.
What are the Questions You Should Ask if your Insurance Company Refused to Settle for Policy Limits?
The insurance company lives and works in the sphere of accidents and resulting injuries. As a result of its business, experience, and expertise, the insurance company has superior knowledge on the subject. Because of the superior knowledge, the insurance company must share and communicate what they know about their client's exposure to any financial loss from the claim. This is why you have hired them, so you can focus on other things. When you learn that your insurance company refused to settle for policy limits, you need to ask some questions and pay close attention for your financial future.
You need to ask:
- What is the probability that I will be found liable or at fault?
- How well did the insurance company investigate the claim being made by the injured person?
- What is the likelihood of money- judgement damages assessed by a jury in excess or beyond the policy limits? What is my personal liability beyond the policy limits?
- What offers of settlement were made and rejected?
- What is the exposure for financial damages and a judgment for me the insured versus the insurance company?
- What relevant factors affecting the claim and settlement have I not been told?
What are Common Areas where Insurance Company is Liable for Bad Faith?
The wrongful denial of coverage when an insurance company unreasonably denied coverage of a loss or claim under the policy without proper cause or reasonable excuse. Failure to defend the insured and settle claims when the insured is liable for damages caused to someone else is also a common example. Unreasonable delay in providing the benefits of the insurance contract by delaying prompt payments of claims is also an example. Underpayment or lowballing by intentionally or negligently paying an amount less than what is owed.
If you learn that your insurance company is refusing to settle the claim and exposing your financial future to a big money judgment, you need to talk to a lawyer about your rights and making a plan. Contact us today to learn more about the best things to do if the insurance company is wrongfully denying a claim or is withholding the benefits of the policy that you purchased.