Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Dec 16, 2019

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A North Dakota couple was awarded $2.3 million in an insurance bad faith case against American Family Insurance after the insurer refused to honor their insurance policy for fire damage.

Refusal to pay

According to news reports, Timothy and Sylvia Moore of Mountain, North Dakota submitted an insurance claim to their insurer, American Family Insurance Company after a fire destroyed a vacant rental property the couple owned. The insurer blamed the couple for the fire and refused to pay on the claim.

The $50,000 policy ended up costing the insurer $1.15 million for engaging in bad faith insurance practices and another $1.15 million in punitive damages for wrongfully denying their valid claim. A North Dakota judge recently upheld that verdict and refused to provide the insurer with a new trial.

You have rights

Like the couple from North Dakota, if your insurance company refuses to pay your valid claim or pay less than its worth, it’s important to remember that you have rights. Here are some things you can do to protect those rights:

  • Stay on top of your claim. Chances are that when you submit a claim to your insurance company, you will likely be dealing with several people including agents, claims representatives and adjusters – none of whom may be ultimately responsible for seeing that your claim is resolved quickly. Staying on top your own claim by keeping notes of who said what, and when, and then following up with those people is essential in most situations. And while the squeaky wheel tends to get the grease; it’s better to be persistent instead of demanding so that your claim remains on the top of the pile.
  • Alert your state insurance commissioner. If you can’t seem to get anywhere with your insurance company after a reasonable amount of time, contact your state insurance commissioner to alert them about your claims experience. That’s what they’re there for and you might be surprised with some states’ abilities to intervene on your behalf.
  • Speak with an attorney. It’s always advisable to speak with an attorney in these matters,  even if it’s only to discuss the matter without doing anything further. An attorney – especially one whose practice focuses in bad faith insurance practices – understands how insurance companies often operate and can provide guidance in how to get your claim resolved quickly.