Duties of the car insurance companies to use good faith

Insurance companies have a duty to their insured to act in good faith. If you are asking for your own insurance company (the first party insurance company) to pay your bills, your own insurance has to act in good faith. If you are asking the insurance company for the responsible party to pay your bills and pain and suffering, that insurance company (the third party insurance company) also has to act in good faith toward their policy holder.

What is good faith? Good faith does depend, in part on the terms and coverage in the insurance contract and whether it’s a first party or third party claim. Some factors are:

  • The insurance company has to investigate your claim in a timely manner.
  • The insurance company can’t make the process onerous by demanding you complete unnecessary forms and paperwork.
  • The insurance company has to make a reasonable settlement offer.
  • The insurance company can’t cancel your coverage just because you made a claim.
  • For example – if your case is clearly worth at least $50,000, the insurance company for the defendant that has $10,000 in coverage can’t offer you $8,000 to try to save $2,000.

Bad Faith Damages

Case law and state law determine the amount of damages you can get from a bad faith insurance company. Damages can include:

  • Interest
  • Attorney’s fees
  • Punitive damages
  • Sometimes, triple damages

How our firm can help

Anyone who has been in a car accident, in North Carolina or Virginia, who believes they might be the victim of bad faith actions on the part of an insurance company needs legal help. Contact us or call us toll free at 888-694-1671 for more information on how to proceed, and whether you might have a significant recovery coming your way.