Paul Krueger Law Firm, A Professional Corporation

The Dangers of Insurance Bad Faith

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05People who choose to live in Portland, Oregon do so for many reasons. The moderate climate, lush natural landscape and beauty as well as a proximity to a myriad of outdoor activities are some of the prime factors that draw people to this part of the country. A generally less stressful, more relaxed approach to life in general is yet another thing that many people love about Portland.

However, that more relaxed nature does not mean that businesses always act fairly. Sadly, not even one’s own insurance company can always be trusted. Instances in which insurers put their own interests ahead of the interests of their insured can leave many wondering what they can do to get help. Insurance bad faith is a serious problem and should not be left unchallenged.

What exactly is insurance bad faith?

Simply put, insurance bad faith is any act of willful fraud on the part of an insurer to deny a customer—the insured party—his or her due compensation. Whether after a car accident, home emergency, medical need or something else, when an insurance company deliberately tries to pay less than what is truly required by the stipulations of a policy, they are considered to have acted in bad faith.

How common is insurance bad faith?

Unfortunately, bad faith in the insurance industry can and does happen. Two recent news headlines illustrate this all too well. In both, legal settlements have been awarded in favor of the plaintiffs.

• Tornado victims in Oklahoma
Three different homeowners together sued Farmers Insurance when they failed to receive what they believed to be their due compensation for damage incurred during a tornado that happened in 2012. A judge has since awarded each plaintiff a total of $5 million, representing $2 million in actual damages and $3 million in punitive damages.
The judge found the insurance company to be guilty of “oppression, fraud, actual and presumed malice, and that they acted with complete indifference to its duty to treat the plaintiffs fairly,” according to the transcript from the court.

• Car accident fatality in Montana
A man died in a car accident caused by a drugged and uninsured driver. His insurance company, Geico Indemnity Company, allegedly attempted to pay his widow only half of the settlement amount she was due and asked her to sign a release freeing the company from any future liability.
The woman pursued the case and was recently awarded $200,000 in damages from the contract with a further $2.5 million in punitive damages. The decision and award was made unanimously by a federal jury.
In both of these cases, the plaintiffs originally only sought what their insurance policies should have paid. In the end, the insurance companies’ attempts to prevent their clients from receiving just compensation worked against them.

What can insured people do?

The most important thing for anyone working with an insurance company to do is to get legal help. Sometimes, attempts to be cheated out of a settlement are obvious but other times they are not. The Paul Krueger Law Firm has been at the forefront of fighting for the rights of insurance customers and knows how to keep clients protected.

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