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How Do You Prove Bad Faith in Court?

Some insurance companies may be guilty of a tort – or wrongdoing – known as bad faith in an attempt to protect their profits. If you can prove bad faith in court, you can receive financial compensation not only for your original insurance claim but for the insurance company’s misconduct against you, as well. Proving bad faith in Arizona often requires assistance from a bad faith insurance attorney.

What Is Insurance Bad Faith?

Even if you always pay your premiums on time and are eligible for coverage based on the terms of a policy, an insurance company may reject your claim. Unfortunately, this is the nature of insurance companies. They are for-profit businesses that do their best to avoid payouts. To combat these tactics, Arizona has an implied covenant of good faith and fair dealing.

This covenant states that an insurance company legally must deal with the insured individual in an honest, fair and reasonable way; in a good-faith attempt to resolve the claim. Arizona also has the Unfair Claim Settlement Practices Act, which dictates the procedures an insurer must use when handling claims. The failure to uphold this covenant or act is insurance bad faith.

Four Elements of a Bad Faith Lawsuit

Insurance bad faith could entitle you to financial compensation. Before you can collect compensation, however, you or your attorney must prove the required elements of your case. If your bad faith claim goes to trial, you will need to present evidence of the following four elements to a judge or jury:

  1. A duty of care owed. The insurance company must have owed you a duty to exercise reasonable care as the insurer responsible for your claim.
  2. A breach of the duty of care. The insurance carrier must have violated the duty to handle your claim in good faith, such as through negligence or intentional wrongdoing.
  3. Unreasonable acts by the insurer. The acts committed by the insurance company must be unreasonable based on the circumstances, such as compared to what a prudent insurer would have done.
  4. Damages caused. You must have proof of compensable losses that you suffered as a result of the insurance company’s bad faith dealings, such as financial losses.

In essence, you or your lawyer must show that the insurance company withheld the benefits due to you with an excuse that was unreasonable. You typically must prove that your insurance claim was valid under the language of your policy but that the insurer failed to act in a good faith attempt to resolve your claim – leading to the damages that you suffered.

What Type of Evidence Can Prove Bad Faith?

Whether or not you win your insurance bad faith lawsuit depends on the strength of your evidence. The burden of proof in a bad faith court case is a preponderance of the evidence, or enough evidence to prove that the insurance company is more likely than not guilty of the tort being claimed. Your lawyer will help you collect clear and convincing evidence to support a bad faith claim, such as:

  • Arizona’s related laws, regulations and insurance codes.
  • The insurance company’s corporate policies.
  • A copy of the insurance policy.
  • The file of your claim created by the insurance company.
  • Testimonies from expert witnesses on how insurance claims should be handled.

Proving bad faith in court requires you to present your documents and witness testimony to a jury in a way that is clear and compelling. The best tool for achieving this is an experienced bad faith insurance lawyer in Arizona. A lawyer will use all available evidence to support your claim and a legal strategy that will optimize your odds of success. For more information about how to prove bad faith in court, contact Surrano Law Offices in Phoenix.