Bad Faith in Uninsured Motorist Claims

Uninsured motorist (UM) coverage is designed to protect drivers when they are injured by someone who carries not enough insurance or none at all to cover the harm they caused. In theory, this coverage steps into the shoes of the at-fault driver. In practice, however, many policyholders discover that filing a UM claim means battling their own insurance company.

Every auto insurance policy includes an implied covenant of good faith and fair dealing, requiring both the insurer and the policyholder to act honestly, fairly, and reasonably toward one another.

When an insurer mishandles a UM claim, it may rise to the level of bad faith, exposing the company to damages beyond the policy limits. Understanding how bad faith UM claim handling occurs can help you protect your legal rights.

What Makes UM Claims Different from Other Auto Claims

Unlike third-party claims, where an insurer defends its policyholder against someone else’s claim, UM claims create a conflict of interest. The insurance company owes its insured a duty of good faith and fair dealing, yet it also has a financial incentive to minimize or deny the claim.

In many UM cases, the insurer:

• Disputes who caused the crash.
• Challenges the severity of injuries.
• Questions whether treatment was necessary.
• Argues that damages are exaggerated.

Insurance companies are allowed to challenge a claim, but they must do so fairly and reasonably. When an insurer goes beyond that by acting unfairly, delaying without cause, or denying a valid claim, it may be considered bad faith.

Common Examples of Bad Faith UM Claim Handling

Bad faith is rarely a single act. More often, it appears as a pattern of unreasonable conduct, including:

• Unreasonable delays. Insurers may drag out investigations, delay responses, or repeatedly “request more information” without justification. Prolonged delays can pressure injured policyholders into accepting low settlements.
• Failure to conduct a proper investigation. An insurer may ignore police reports, eyewitness statements, or medical records that support the claim. Cherry-picking evidence to justify a denial or failing to investigate at all can constitute bad faith.
• Undervaluing the claim. Lowball settlement offers that do not reflect medical bills, future treatment needs, lost income, or pain and suffering are a frequent bad faith tactic in UM claims.
• Improper denials. Bad faith may arise when insurers misapply policy exclusions, demand proof beyond what the policy or law requires, or deny claims despite clear liability and damages.
• Failure to explain decisions. Insurers are typically required to explain the factual and policy basis for denials or settlement positions. Vague or shifting explanations may indicate improper claim handling.

Contact a Personal Injury Lawyer

Car accidents can be tough to handle, especially if your insurance company gives you trouble with your uninsured motorist claim.

Dealing with the insurance company can be tricky. Seek legal help from a Houston auto accident attorney from The West Law Office, PLLC. We can work with the insurance company and ensure you receive the compensation you deserve. To schedule a consultation today, call (281) 347-3247 or fill out the online form.

Source:

justia.com/injury/insurance-bad-faith/