Experienced Trial Attorneys Holding Insurance Companies Accountable for Bad Faith Actions
You buy an insurance policy to help if you ever experience difficult times. When a fire destroys your home, when disaster strikes your business, when you are diagnosed with a serious illness and need long-term care, you depend on the insurance company to be there.
Unfortunately, however, According to the National Association of Insurance Commissioners (NAIC), an insurance company’s handling of an insurance claim is the most common complaint from policyholders, followed by the insurance company’s delays in paying a claim, denial of a claim and unsatisfactory payments on claims.
In New Mexico, bad faith insurance litigation can result in monetary compensation for the loss suffered by the policyholder and often punitive damages are awarded against the insurance company to punish it.
The New Mexico Insurance Code provides additional remedies, in addition to the traditional common law bad faith lawsuit. Included here are lawsuits for violations of the Unfair Insurance Practices Act, which allows policyholders/insureds to seek compensation for their losses, attorneys’ fees, costs, and often treble (triple) damages if the Act is explicitly violated by the insurance company.
Because of litigation insurance companies are prevented from misrepresenting benefits about the policy to their insured; and this is the case across the board, as numerous types of insurance have been the subject of bad faith insurance litigation.
Insurance Company Fails to Pay Benefits,Insurance Company Delays in Payment of Benefits
If an insurance company won’t pay for claims they are legally required to pay, it is important to know your consumer rights and seek legal counsel. The first step is to know your insurance policy, a copy of which should have been provided to you when you signed up with your insurance carrier. The insurance policy identifies what is covered, what steps you need to take when filing a claim, the time frame in which a claim must be submitted, and the process of estimating damage reimbursement. If it is clear that the insurance company should pay, but won’t, then a lawsuit may need to be filed to secure benefits that are owed to the policyholder. In addition to establishing your rights under the insurance policy, the New Mexico Insurance Code allows parties to bring a lawsuit for violations of the Code. The Unfair Insurance Practices Act, for example, allows policyholders to seek compensation, attorney’s fees, costs, and treble damages if an insurance company has refused to pay benefits it owes or unreasonably delays paying benefits it owe to its policyholder.
Insurance Company Fails to Defend or Indemnify
We all purchase insurance for a number of reasons but one of the most important reasons is to defend and indemnify yourself in cases where you caused, or it is alleged that you caused, an injury to someone else. Sometimes an insurance company will attempt to avoid defending and indemnifying their policyholders in an effort to save money. The insurance company will attempt to justify their actions based on the policy language or changes it made to the policy without properly notifying its insured. Other times the insurance company may justify not defending its policyholder based on the type of claim made by the other party. In these types of situations, it is important to understand your insurance policy and what it covers.
Unfortunately, insurance policies are often not written in plain English and it can take a lawyer or an insurance expert to decipher what is covered and what is not covered. If the policy provides for coverage including a legal defense and indemnification, then the insurance company may be acting in bad faith.