Insurance Bad Faith Claims
Our Firm also handles litigation against insurance companies for failure or refusal to pay on a policy claim. Perhaps the most egregious example of such a denial is in the context of life insurance. A life insurance policy provides often critical financial support for the survivor(s) of the deceased. The absence of such funds for the survivor contemplated by the deceased while he was living can be devastating to the survivor.
When a policyholder pays his/her monthly premiums to the insurance company, he/she reasonably believes that the company will pay the death benefit to the beneficiary. The situation which leads to the need for litigation is when the insurance company reads or interprets its own policy in an incomplete or unfair way to justify its denial of a benefit payment(s). Litigating on a breach of contract case against an insurance company entails an understanding of the underwriting and claims handling procedures. Such cases often depend on the use of an expert witness, preferably a former underwriter at another company, to adequately explain to a judge or jury what a company did wrong in failing to pay.
Insurance companies are in business to make profit and the failure or refusal to pay on a claim saves them money. Short of litigation however, there may be an internal claims or appeal process a beneficiary can take advantage of to get money from an insurance company. In addition, consumers may also file a Complaint with the New York State Department of Financial Services at: http://www.dfs.ny.gov/consumer/fileacomplaint.htm. These complaints will force a company to file a written response and can gain valuable information against the company even before a lawsuit.
Two popular reasons for a denial of a claim is that material misrepresentation was made at the time the policyholder executed the application or that the occurrence claimed of is not within the scope of the insurance policy. As such, the litigation rises and falls from the discovery process over evidence of misrepresentation and/or the language or interpretation of the policy itself. Rarely will the insurance company witness admit there was no such misrepresentation or that the act was a covered event by the policy. It is typically for the litigation to draw out these facts and convince a judge.
The term “bad-faith” arises in this context when the company’s adjuster among other things, denies a claim for an illegitimate reason; requires the beneficiary to undergo an unreasonable process in providing information for the claim; does not conduct a requisite investigation of the claim; fails to timely process the claim. As in any breach of contract claim, the beneficiary is entitled to bring the case in New York within a six (6) year Statute of Limitations period. Beyond that time, the case will likely be dismissed absent some extraordinary showing. The plaintiff will sue for actual, consequential and incidental damages stemming from the company’s denial.
Proof of bad-faith in an egregious circumstance might also lead to a claim for punitive damages. These are additional damages, usually as a function of actual damages that a beneficiary can claim for the insurance company’s intentional conduct. An award of such damages by a judge are meant to punish the company and discourage it from denying beneficiaries in that way in the future.
Law Offices of Kupillas & Unger file insurance bad-faith claims New York City’s five boroughs, including New York, Brooklyn, Queens, Kings, Bronx, Staten Island (Richmond ) counties, Long Island’s Nassau & Suffolk Counties, Westchester, Orange, Rockland and certain up-state New York counties.