After faithfully paying insurance premiums for months or even years, you expect the same service back from your insurance company. However, this is not always the case. In fact, if you have been in an accident or require insurance coverage, you may find your insurance company immediately denying your claim. While insurance companies can deny your claim for a valid policy reason, they cannot act in bad faith or place the insurance company’s economic interests above your own. This is what is commonly referred to as “bad faith insurance” practice. In some situations, denial of an insurance claim may constitute under state law a “vexatious refusal” to pay, or what in other states is described as a failure to pay “without just cause or excuse”. In some cases, insurers may be required to pay penalties or attorney’s fees.
At Monsees & Mayer P.C, we have handled many bad faith insurance claims. In fact, our skilled Kansas and Missouri insurance law attorneys speak at seminars to help train other attorneys about the complexities of bad faith insurance claims. To talk about your legal options today, contact us online.
Bad Faith Insurance Claims
A bad faith insurance claim is one in which the insured is making a claim directly against an insurance company. Bad faith liability comes from the contract principle of good faith and fair dealing. This is an implied covenant, which sets out and governs every duty the insurer has toward the insured. In the simplest terms, an insurance company acts in bad faith when its own economic security and interests above that of its insured — you.
A first-party vexatious refusal claim is when the insurer refuses to pay a claim the insured has made and that is owed to the insured under the insured’s own policy. This is generally a dispute over the correctness and reasonableness of the insurance company’s determination that there is no coverage under the policy or the amount of coverage for a particular claim.
A third-party bad faith claim (liability insurance) involves three parties: the insured, the insurer and a party who was the plaintiff in a personal injury case in which the insured was a defendant. A bad faith claim arises when the insurance company breaches its duty to either defend the insured or pay the claim for an amount that is within the policy limits of the insured. If a settlement, judgment or verdict results in excess of the insured’s policy limits, a bad faith claim may arise.
For more detailed information about Missouri and Kansas bad faith insurance laws, please go to our article on Bad Faith Basics.
Click here to contact our quality Kansas City bad faith insurance claims lawyers and have your questions answered. Our lawyers have experience handling the issues behind many of your questions. Let us put your mind at ease by answering these and other questions for you.