Do I have a case for a bad faith claim?

UPDATED: Oct 2, 2022

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Do I have a case for a bad faith claim?

Hello, my insurance company, American
family, paid out two separate claims
finding me at fault without ever
contacting me. The only way I found out
that these claims even existed or were
paid, is because they are using these
claims as part of a decision to not
renew my insurance. One of these claims
paid out over 7,000 and finding me at
fault, this will affect my future
Insurance prices. By not informing me
that a claim was filed, I was therefore
unable to to defend myself, unable to
counter the claims made, unable to
contest the amount to be paid, unable to
bring in or request a third party to
evaluate the damage, and unable to
provide witnesses that could have
resulted in a lower pay out or dismissal
of the claim. If there is a a way to
contest these claims against me
internally and have them removed from my
record, I’m am unaware.

Asked on October 2, 2019 under Insurance Law, Nevada


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

In theory, you have a case, for the reasons you describe in your question. But there are serious challenges in bringing it. As the language from the case you cite indicate, you can only recover the "resulting damages"--which means the damages you can prove. That means you'd have to prove by a "preponderance of the evidence"--i.e. convince a court that it is more likely than not--that had they notified you so that you could have gotten involved, you could have won those cases entirely or had less damages assessed--which will not be easy to do. And even if you can do that, since they paid for you and you did not pay, you'd have to also prove to the court's satisfaction the "resulting losses" you suffered--i.e. the increase in premiums, which means proving how much more your premiums increased vs. what they would have increased had you had the chance to get involved. It is very difficult to see how you can do these things to any certainty.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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