Mansell, Engel & Cole

How bad faith often arises in insurers’ claims handling

The very title of a recent media piece on insurance companies – Avoiding and Defending Against Bad Faith -- reveals that the industry has a material problem on its hands.

We suspect most of our readers readily understand what bad faith conduct is without the need for a clarifying explanation. They know intimately what it entails, either via stories related by third parties or through their own painful experiences.

Legions of Oklahoma policyholders and other insured parties nationally have butted heads with insurers over the years, and many of them have prevailed in disputes alleging misconduct and lack of performance.

The above-cited article is written from the perspective of insurers seeking to skirt bad-faith claims. Additionally, though, it serves quite well as a reminder of what gets many insurers in trouble with aggrieved policyholders in the first place.

Insurers’ woes often arise from the outset of their response to a covered claim, with their review of coverage. The aforementioned piece notes that a disconnect between what an insurer says a policy covers and what its language actually states can be glaring.

And that can quickly sound warning bells in the collective mind of any jury, which will likely be suspicious of every ensuing argument urging coverage denial or underpayment,

Here’s another point implicitly advanced in the cited article: Treating jury members as though they were stupid is a losing strategy. It will flatly backfire on a bad-faith insurer trying to lead a panel in an illogical and/or unlawful direction.

“Evaluate the claim how jurors would likely decide the issues,” the piece soundly advises, or risk dire consequences in a pro-claimant award that could include punitive damages.

A policyholder experiencing blowback from an insurer on a covered claim might reasonably want to enlist the timely advice and strong advocacy of a proven insurance law attorney.

If you are performing your contract-related duties in good faith, you have an absolute right to expect your insurer will respond in the same manner. When that is not the case, an experienced legal advocate can make a difference through diligent promotion of your rights and best interests.

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