When insurance companies unreasonably deny or delay legitimate motorcycle accident claims, they may be acting in bad faith. Bad faith claims provide remedies beyond policy benefits, holding insurers accountable for unfair practices. Understanding bad faith helps victims fight back against unjust treatment.
What Constitutes Bad Faith
Bad faith occurs when insurers fail to deal fairly with policyholders. The core element is unreasonable conduct - denying valid claims, delaying without justification, or failing to investigate properly.
First-party bad faith involves your own insurer mistreating you. UM/UIM claims, MedPay disputes, and collision coverage denials can support bad faith claims when handled improperly.
Third-party bad faith by the at-fault driver's insurer may create claims in some jurisdictions. However, most bad faith claims involve your own insurance company.
Common Bad Faith Practices
Unreasonable claim denials - rejecting valid claims without adequate investigation or proper basis in policy language.
Lowball offers - consistently offering far less than claims are worth, hoping claimants will accept inadequate settlements out of desperation.
Unnecessary delays - taking unreasonably long to investigate, respond to communications, or process claims without legitimate reasons.
Inadequate investigation - failing to gather evidence, interview witnesses, or properly evaluate claims before denying coverage.
Misrepresenting coverage - telling policyholders they don't have coverage that actually exists or misinterpreting policy terms to deny benefits.
Proving Bad Faith
You must establish that your claim was valid and covered under the policy. A legitimate coverage dispute isn't bad faith even if you disagree with the outcome.
Prove the insurer knew or should have known the claim was valid. Obvious claims denied without reasonable basis support bad faith findings.
Document the insurer's unreasonable conduct. Keep records of all communications, delays, inadequate responses, and improper denials.
Damages for Bad Faith
Contract damages include the policy benefits improperly denied. This is the starting point - what you should have received under the policy.
Consequential damages compensate for harm caused by the denial - additional expenses incurred, credit damage, emotional distress from financial hardship.
Punitive damages punish particularly egregious conduct. When insurers consciously disregard policyholders' rights, punitive awards deter similar behavior.
Attorney fees may be recoverable in bad faith cases, unlike typical contract disputes where each party pays their own attorneys.
State Variations
Bad faith law varies significantly by state. Some states allow broad bad faith claims; others strictly limit them.
Statutory bad faith provisions in some states create specific remedies and requirements. Others rely on common law bad faith developed through court decisions.
Third-party bad faith against liability insurers is available in some states but not others. Check your jurisdiction's rules.
Building a Bad Faith Case
Document everything. Keep copies of all correspondence, note phone conversations, and preserve evidence of insurer conduct.
Comply with your obligations. Provide requested information, meet deadlines, and cooperate with investigation. Don't give insurers legitimate reasons to delay.
Get expert opinions supporting your claim. Medical experts, valuation experts, and insurance industry experts strengthen your position.
Note patterns of behavior. Similar treatment of other claimants shows systemic bad faith practices.
Timing of Bad Faith Claims
Bad faith claims typically cannot be filed until coverage disputes are resolved. You generally must establish coverage first before pursuing bad faith.
Some states allow concurrent bad faith claims - suing for coverage and bad faith simultaneously. Others require sequential litigation.
Statutes of limitations for bad faith differ from coverage disputes. Understand applicable deadlines in your state.
Alternative Remedies
State insurance department complaints may prompt insurer response. Regulators can investigate and impose penalties for unfair practices.
NAIC (National Association of Insurance Commissioners) market conduct examinations may investigate widespread insurer misconduct.
Class actions address systemic bad faith affecting many policyholders. Individual claims may be too small alone but significant collectively.
Preventing Bad Faith Situations
Choose insurers with good claim-handling reputations. Company practices vary significantly.
Document your claim thoroughly from the start. Complete documentation prevents disputes and supports your position if problems arise.
Respond promptly to insurer requests. Don't give them reasons to claim delays are your fault.
When to Pursue Bad Faith
Consider bad faith claims when insurers clearly violate their obligations - obvious valid claims denied without reason, extreme delays, or misrepresentation.
Consult an experienced attorney to evaluate whether insurer conduct rises to bad faith level. Not every dispute qualifies.
Bad faith litigation is complex and resource-intensive. Strong cases with significant damages justify the investment.