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Insurance Bad Faith

We purchase insurance to protect us against losses, from minor ones to the most catastrophic, and we expect our insurance company to honor the policies we pay for when we make a legitimate claim. Nevertheless, it’s unquestionable that insurance companies don’t turn large profits by being eager to settle claims, no matter how valid. Their very nature is to act in their own interest, yet in Washington and other states, insurers have a legal duty to act in their insureds’ interest – and never in bad faith.

Still, insurance companies acting in bad faith is nothing new, and when an insurance company and the attorneys they engage to defend against a legitimate claim act in bad faith, PCVA’s bad faith insurance attorneys have the experience and know-how to step in and ensure that the claim is fairly settled.

What constitutes insurance company bad faith? It can be anything from simply denying a valid claim without giving a reason to making threatening statements. Among the many forms of bad faith are:

  • Outright refusing to pay a valid claim
  • Denying a claim without giving a reason
  • Delaying or denying decisions on claims
  • Delaying payment of a valid claim
  • Failing to conduct a prompt and complete investigation
  • Failing to settle a claim where liability has become reasonably clear
  • Offering less money than a claim is worth
  • Delaying or denying requests for medical treatment approval
  • Making threatening statements
  • Misrepresenting the law or policy language
  • Refusing reasonable requests for documentation
  • Putting insurance company profits over a policyholder’s valid claim

How Do Insurance Companies Mishandle Claims?

Even in cases where the insurance company has accepted responsibility, and the policy limits are clear, insurance companies may still mishandle claims and generate bad faith accusations.

Investigating Claims. Insurers have a duty to promptly, thoroughly and reasonably investigate claims, and may not cherry-pick what they investigate. Nevertheless, they may be more likely to investigate reasons not to pay (i.e., to deny) a claim than investigate why they should pay. Insureds have a right to be informed by the defense counsel hired by the insurer. Defense counsel has a duty to intervene with the insurance company if necessary – take more depositions, stay informed, and keep tabs on the liability picture.

Failure to Give Insureds the Benefit of a Doubt. Washington State law says that insurers’ duty to defend claims against their insureds is as important as their duty to pay claims against them. Yet insurers often interpret unclear areas of the law or their own insurance policies to deny defense or payment of a claim. However, insurance companies are required to give insureds the benefit of a doubt and accept defense of a claim when the law is unclear. Insurance companies also are required to give that same benefit of a doubt to their insureds and accept their defense when there’s a question of whether their own insurance policies cover the allegations against them. And insurers can’t rely on unreasonable interpretations of the law or insurance policies to deny payment of a claim.

Failure to Respond. Insurers often fail to respond to reasonable settlement demands. Often in relatively small personal injury claims the plaintiff’s attorney will send the insurance company a settlement demand package, but the insurance company may not respond at all, or they respond and reject it. Thus, the insured gets dragged through litigation, and ultimately the insurance company accepts a settlement. The insurance company is not absolved of earlier bad faith, however; it is required to act in the insured’s interest in the moment, not in retrospect.

Waiting Until the Brink of Trial. Insurers may wait until the brink of trial – or even during trial – to make a settlement offer. Washington State bad faith law not only allows claimants to collect actual damages; claimants may also collect for pain and suffering as well as emotional distress, especially if on the brink of trial. Insurers may not force an insured to go through ligation for no good reason.

What Are the Laws Regarding Insurance Bad Faith in Washington?

Common law and statutes impose a duty of good faith and fair dealing on insurers, who have a duty to give equal consideration to the insured’s interest in all situations and may not put the insurer’s interests ahead of the insured’s. This is where most insurers run aground, often making unreasonable and self-serving decisions. In this heavily regulated environment, the Washington administrative code imposes general and specific duties on insurers, duties which are often specific to the type of insurance. One section of the code delineates a long list of unfair practices, such as failing to timely respond, failure to timely settle when the liability is clear and many others. These unfair practices and consumer protection laws are the basis for bad faith claims.

The Importance of Experienced, Skilled Representation

While the law in Washington State tends to favor plaintiffs, policyholders with bad faith claims against insurers in any matter – and especially in major losses such as significant personal injury – need a firm that fights insurance companies on a regular basis, knows how they work, and clearly sees when they are acting in bad faith.

Policyholders themselves are rarely familiar with the bad faith claim process, and personal injury lawyers, too, are not always well-versed in the complexity of bad faith claims. PCVA bad faith insurance lawyers have been pursuing insurance bad faith for decades and are among the best-regarded plaintiffs’ attorneys in the state, resolving the most complex cases, including those involving covenant judgments. Know that if we are handling an insurance bad faith matter, we have fully vetted the case and found it worthy of pursuit. Contact us to learn more about how we can help you with your case.

The Go-To Firm for Covenant Judgments

In a covenant judgment, the plaintiff settles with the defendant for the right to sue the insurance company for bad faith. Frequently, when plaintiff’s damages are high and the defendant is underinsured, the insurance company doesn’t act quickly enough in offering policy limits and forces the defendant to trial.

Through a covenant judgment, the plaintiff may sue the insurer for bad faith and recover the full amount from the insurer. Our bad faith insurance attorneys are well known as the go-to resource where covenant judgments are concerned. In fact, we not only wrote the Washington State Association for Justice (WSAJ) Insurance Law Deskbook chapter on covenant judgments, but we have also helped create the law in this complex area through cases of first impression.

Other Complex Insurance Litigation Services

PCVA attorneys are known for the breadth of matters we handle and for our successes in even the most complex litigation. We frequently consult on or serve as co-counsel in matters involving insurance coverage and interpretation of insurance policies.

For example, sometimes an insurer denies coverage, then sues the plaintiffs and defendants (usually in federal court) to obtain a court declaration of “no coverage.” Few plaintiffs’ attorneys have experience in this highly specialized area of the law and are thus eager to engage us to look at the insurance policies and provide an opinion on what they mean or to take over the coverage lawsuit.

Additionally, our experience and track record in handling appellate cases are well known. We have many cases go through the appellate process and with notable decisions, including cases of first impression. Learn more about our post-trial and appellate practice.

Compassion & Respect

Clients expect to be treated with compassion and respect, especially in a bad faith situation. We know we are dealing with people who may be experiencing the worst event of their lives and are keenly aware of what it’s like to be injured, displaced and perhaps even called a criminal by the insurance company. Cases are time-sensitive and often emotionally fraught.

We pride ourselves on excellent communication, responsiveness and efficiency while aggressively pushing cases for the client. We don’t let cases languish. Empathy and professionalism are our hallmark. Our goal is to help clients navigate the labyrinth the insurance companies have set up for them, even when our clients are other lawyers.

A Plaintiff-only Practice

We are a plaintiffs-only practice and are 100% committed to representing plaintiffs only in all insurance bad faith matters. Both plaintiffs and their trial counsel can rest assured that PCVA would never accept work that strives to overturn plaintiff verdicts or take on a case that would negatively impact the laws in place that protect plaintiff rights.

How Much Do You Charge?

Our work is done on a contingency basis. This means that you do not pay us on an hourly basis, and we advance the costs of litigation. If we help you resolve your case, we receive a percentage of the amount you receive, and you reimburse us for the costs we advanced on your behalf.