Life insurance policies are purchased by those who want to protect their loved ones after their demise. Your family member, business partner or friend may have bought a life insurance policy and named you as the beneficiary to ensure you were taken care of. The insured likely paid hundreds or thousands of dollars in premiums every year to ensure protection of their finances when they were gone.
Insurance companies are happy to collect those premiums year after year, but not as eager to pay out rightful death benefits. If an insurance company fails to process claims in a fair and appropriate way, this is considered bad faith. You can file a bad faith insurance lawsuit with the help of a life insurance claim attorney so you can recover the death benefit as well as compensation for losses the insurance company has caused.
Understanding Bad Faith Insurance Lawsuits
Insurance policies are contracts. The insurer agrees to pay out if a covered event happens, which is the death of the insured in the case of life insurance. In return, the insured agrees to pay premiums for the policy. When these premiums are paid month after month, the insured has no choice but to trust that the insurance company will keep its end of the bargain after a death occurs.
To protect the insured policyholders, the law mandates that there is an implied duty of good faith and fair dealing inherent in every contract of insurance. Essentially, this means that in addition to complying with the terms of the insurance policy contract, insurance companies also have a duty to act in good faith. They cannot unfairly deny claims, impose unnecessary and burdensome requirements on policyholders, or otherwise treat those who buy insurance in an unfair and inappropriate way.
If an insurance company fails to live up to its inherent duty of good faith, those who are beneficiaries of the insurance policy can take legal action. Unlike a typical breach of contract claim, where you are allowed only to sue for actual provable financial loss, a bad faith cause of action is a tort claim. This means it is treated more like a personal injury case than a breach of contract claim, so the insured can recover compensation that may be higher than the specified insurance policy limits.
Taking Legal Action for Bad Faith
Bad faith insurance lawsuits are complicated because you need to prove that the insurance company acted without legitimate justification in denying your claim, delaying your payout or processing your claim. You need an experienced life insurance attorney who can assist you in proving your case and in demonstrating the extent of the damages you experienced because of the unfair treatment from the insurer.
Boonswang Law is a firm focused on bad faith insurance claims. We have extensive experience standing up to big insurance companies and have a strong reputation for getting our clients the compensation they deserve when an insurer treats them wrongfully. Call today to schedule your free consultation and learn more about how a life insurance claim attorney can help when your insurer has acted in bad faith. You can reach us toll-free by calling 1-855-865-4335.