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Are there defenses to bad faith claims?

On Behalf of | Jan 26, 2021 | Bad Faith Insurance Defense

When an insurance company allegedly acts in “bad faith,” the provider attempts to avoid paying a legitimate claim. Insurance companies have an obligation to pay for a covered peril, and the insured must understand the company need not pay out on excluded perils. Sometimes, a customer could accuse an insurance company of bad faith and then sue in a Louisiana court. Not all accusations have merit, nor are all claims of bad faith accurate. Insurance companies may need to go to court to show that they did not act in bad faith when denying a claim.

Denying a false claim is not bad faith

When a light changes to red and a vehicle goes through the light and ends up hit by another vehicle, claiming the vehicle traveling through the green light was liable might be dubious. Red means red, and the law doesn’t provide “extra seconds” to ignore a recently turned red light. An auto insurance company provides liability coverage for a driver’s negligence. When the driver is not negligent, there might be no liability at all.

Homeowner’s insurance might cover theft, and if thieves stole artwork, the homeowner might have a claim. If the homeowner claims the painting was worth $10,000, but its assessed value is $8,000, the insurance company would likely pay on the legitimate worth and not an arbitrary figure.

Disputes about bad faith may come in several forms. If litigation arises, an attorney might provide evidence that the claimant is in the wrong.

Providing evidence in court

Returning to the previous example about the artwork, an attorney may present an expert witness to provide an opinion about the painting’s true worth. Regarding auto accidents, an attorney may present video or photographic evidence showing a driver was not negligent.

An attorney might also reveal the insurance company provided details about exclusions in the contract. The insured might not read the terms, but failure to read provided documents may not afford the insured anything.

A business law attorney may represent an insurance company against a bad faith claim. Not all bad faith claims are legitimate ones.