Elements to prove in an insurance bad faith claim

Most consumers will agree that insurance companies are not the easiest entities to deal with, especially when it comes to evaluating and paying out claims. Despite the catchy commercials and musical jingles, consumers may not realize that insurers are in the business of offering coverage not just to be there when things go bad, they do so to make money.

Because of this, some insurers may take their own sweet time paying out claims. Even worse,  they may not provide all of the information necessary for a consumer in the midst of a lawsuit to make informed decisions, thus leaving them vulnerable to economic damages if a judgment is issued against the consumer.

If it sounds like these missteps should be actionable, you would be in good company. Arizona law allows consumers to bring bad faith lawsuits against insurers who fail to honor their responsibilities under the contract. This is because with every insurance contract, there is an implied duty of good faith and fair dealing. Basically, an insurer promises that it will not do anything to thwart or impede a consumer’s right to obtain compensation or benefits under the contract.

To prevail in a bad faith insurance suit, a consumer must show that the insurer intentionally denied a legitimate claim, failed to pay such a claim or delayed payment without a reasonable basis. A consumer must also prove that the insurer knowingly acted without reason or failed to take adequate measures to determine if it was acting reasonably.

Proving this can be a complicated endeavor, but with an experienced insurance litigation attorney, your rights can be protected.