Alabama residents depend on their car insurance companies to protect them when they suffer an injury or property damage in an accident. An insurer should provide the insured and anyone else who suffered losses with compensation. Insurance companies have a duty to honor their contracts and provide appropriate levels of compensation. Depending on the language in the insurance contract, the insurance company should compensate the insured for lost wages, property damage, medical expenses, mental anguish, and more. Unfortunately, many insurance companies undervalue claims or deny claims altogether. Insurance companies cannot act in bad faith under Alabama law.
Insurances Companies Have an Obligation to Act in Good Faith
Insurance companies in Alabama are for-profit companies. They seek to provide as little compensation as legally possible to claimants so they can maximize their profits. Insurance companies have a reputation for delaying payments, denying valid insurance claims, or offering lowball amounts.
Alabama law requires that insurance companies act in good faith whether the person filing is a first-party claimant or a third-party claimant. Insurance companies categorize claimants into the following two categories:
- First-party claims by the party who owns the insurance policy
- Third-party claims made by a person who suffered injuries by the insured person
Insurance companies must carefully evaluate the insurance claim and act in good faith when determining how to process the claim. Acting in good faith requires insurance companies do the following:
Investigate the facts of the claim adequately- Consider the weaknesses and strengths for all of the evidence submitted with the claim
- Evaluate the insurance claim honestly
- Interpret the client’s insurance policy honestly
- If the claimant sues and wins, evaluate the whole range of a verdict
- Consider the likelihood that the claimant might file a personal injury claim and win
- Settle the claim within the limits of the policy, when possible
- Consider the insured individual financial interests
Examples of Bad Faith Insurance Tactics From Alabama Insurance Companies
At Heninger Garrison Davis, our lawyers have seen some very disappointing bad faith tactics on the part of insurance companies. Our lawyers have helped many Alabama residents recover compensation from insurance companies that are acting in bad faith. Some of the bad faith tactics used by Alabama insurance companies include the following examples:
- When liability is obvious, insurance companies refuse to negotiate a fair settlement
- Denying insurance coverage without engaging in a claim investigation
- Delaying insurance payments for valid insurance claims
- Misinterpreting the language of an insurance policy for the benefit of the insurance company
- Transferring an insurance claim multiple times as a delaying tactic
- Threatening the insured individual with inappropriate statements or disrespectful comments
- Offering the insured significantly less compensation than the claim is worth
- Refusing to respond to requests for documentation
- Refusing to provide a written explanation of why the insurance company denied the claim without explanation
Seeking Compensation for Bad Faith Insurance Claims in Alabama
If you have attempted to recover from an insurance company who is acting in bad faith, you are probably extremely frustrated. Hiring a skilled attorney to handle your claim against a bad faith insurance company is essential. Proving that an Alabama insurance company has acted in bad faith can be challenging. Insurance companies are good at attempting to cover up their bad faith actions. Nonetheless, the lawyers at Heninger Garrison Davis have helped many clients recover against bad faith insurance companies.
Under Alabama law, insurance companies that deny or delay an insurance claim without a debatable reason act in bad faith. These insurance companies may be liable to the claimant. When the claimant can prove that they have acted in bad faith, the claimant is entitled to the following compensation:
- Compensatory damages for financial and emotional losses suffered by the claimant
- Additional punitive damages to act as a punishment for the insurance company’s bad actions
Insurance companies that act in bad faith usually do not have to pay out more than the insurance policy allows. However, they may be liable for the full amount of a verdict recovered for the bad faith claim.
Our Bad Faith Insurance Lawyers can Help
Our lawyers have helped many Alabama residents recover compensation from insurance companies who acted in bad faith. We fight for our client’s right to seek compensation above and beyond the limits of the insurance policy. If an insurance company has delayed, denied, or underpaid an insurance claim, we can help. Contact our Birmingham bad faith insurance lawyers today to schedule your free case evaluation today. Call today at 844-239-2891.
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