The insurance company who sold you a policy is your partner in the sense that the two of you have agreed to create an insurer-insured relationship. Don’t be fooled into thinking that it’s a relationship of equals, though. The insurance company pretty much gets the better of the deal in most ways.
It gets its benefit (the premium) right away and throughout the life of the policy; you get your benefit (coverage) only when an insured loss occurs, which may be years away, or never. You get a file a claim when a loss occurs, and sit waiting for the insurer to keep its part of the bargain; the insurance company gets to investigate, interview, analyze, and eventually decide whether to pay or not to pay, and—just as importantly—decide when it should decide whether to pay.
And, of course, while the insurer is deciding, you get to try to deal with the loss, despite not having been compensated by the insurer; the insurer gets to keep the money, invest it, and use it any way it wants. Sound fair? No, it didn’t sound fair to the courts in Ohio, either.
Making Insurers Accountable
Decades ago, the Ohio Supreme Court recognized that the nature of the insurance relationship required that insurers have a common law duty to act in good faith when dealing with the people they insure. If they breach that duty, they commit the tort of bad faith. The test for bad faith is basically whether there was “reasonable justification” for the insurer’s refusal to pay.
That test means that all the circumstances of the case become relevant. Taken together, do the circumstance show that the insurer did or did not have a reasonable justification for denying the claim? Proving the lack of reasonable justification is best left to attorneys who have in-depth knowledge of the insurance industry, especially the process that insurers use to evaluate claims.
Evidence of Reasonableness
In essence, anything the insurer does that indicates it is more concerned with its own economic interests than in fulfilling its policy obligations to the insured is evidence that the insurer acted unreasonably. That includes such things as
- Whether the insurer adequately investigated the claim;
- Whether the insurer’s investigation was prompt;
- Whether the insurer followed or ignored the recommendations of the adjuster;
- The degree to which the insurer communicated with the insured during the claim process;
- Whether the insurer was honest in its communications;
- Whether the insurer pressured the insured to accept a lower amount than claimed by threatening to deny the claim or drag it out.
Potential Bad Faith Damages
If you are successful in proving that the insurer was guilty of bad faith, you can recover the amounts that the insurer should have paid under the contract, as well as all damages that resulted from the insurer’s denial or delay (lost profits, use, and the like).
In cases where the insured’s conduct is particularly egregious, you may also recover punitive damages and attorney fees. This requires establishing that the insurer acted with malice, defined to include “conscious disregard” of the insured’s rights.
Get Help for Your Ohio Insurance Bad Faith Claim
Bad faith claims mean a difficult battle with an insurance company that has tremendous resources. But it’s the only way that you can make the bad faith insurer pay for the harm that it caused you at the very time you needed its help. The best way to begin, or to consider whether to begin, a bad faith claim against your insurance company is to talk to an attorney with solid experience in those kinds of cases. At the Surrano Law Offices, we have spent decades successfully holding bad faith insurers to account. We’re experienced in all kinds of insurance, from life to disability to property and commercial. Call Surrano Law today to discuss the circumstances of your case and your legal options.