Insurance Bad Faith

What Is Insurance Bad Faith?

Every insurance contract contains provisions that describe what each party promises to do. These are the written “terms” of the contract. However, there is another promise between the parties that the American legal system recognizes is binding upon both parties even though it is not written in the contract. This promise is referred to as the “implied covenant of good faith and fair dealing,” which requires that neither party will do anything to injure the right of the other to receive the benefits promised in the agreement.

The law of insurance bad faith essentially requires an insurance company to act fairly and in good faith towards its policyholders and to consider the interests of its policyholders equal to its own interests. It also prohibits an insurance company from denying or delaying a claim unreasonably.

Viper Law Group Trial Attorney and founding member Tanveer Shah handles insurance bad faith cases, where an insured may have a claim against their insurance company because they did not act fairly or in good faith when delaying or denying a legitimate claim.

Attorney Shah explains to his clients that these cases are better understood when considering the following: Buying insurance is unlike buying any other product because what is being bought is peace of mind. The only time you need this product is when you are in the most need and the most vulnerable.  When an insurer betrays this trust the effects oftentimes are devastating.

In Arizona, to show a claim for bad faith the policyholder must show the absence of a reasonable basis for denying benefits of the policy and the insurance company’s knowledge or reckless disregard of the lack of a reasonable basis for denying the claim.

It is important to realize that not every wrongful denial of benefits amounts to bad faith. A law firm that is skilled in this area of practice can properly evaluate your claim.

What Are Punitive Damages?

Insurance companies are billion dollar corporations whose profits depend on paying out as little as possible when there is a claim, while continuing to collect premiums from you month after month. This business model is fundamentally unfair to every policyholder. To ensure that insurance companies treat you fairly, punitive damages are intended to reform or deter the insurance companies and others from engaging in bad conduct. We all have insurance and punitive damages serve a vital role in the protection of all of our rights as policyholders. When the conduct merits it, juries may award punitive damages to “teach the insurance company a lesson” in the hopes they will not wrongfully delay or deny the next policyholder’s legitimate claim.

When May A Jury Award Punitive Damages In Arizona?

In Rawlings v. Apodaca, 151 Ariz. 149, 162, 726 P.2d 565, 578 (1986), the Arizona Supreme Court held that punitive damages are restricted to those cases in which the insurance company’s wrongful conduct was guided by evil motives. The Court stated that the evil mind which will justify the imposition of punitive damages may be manifested in either of two ways. According to the Court, this “evil mind” is found where insurance company intended to injure the policyholder, or where insurance company did not intend to cause injury but consciously pursued a course of conduct knowing that it created a substantial risk of significant harm to others.  The latter is often true in most of our clients’ claims.  Where the facts in a case satisfy the standards of the Rawlings case punitive damages can be awarded by a jury.

Recent Insurance Bad Faith Trial Verdict

Arizona Jury Returns Multi-Million Dollar Verdict in Phoenix Bad Faith Insurance Case

Attorney Tanveer Shah’s most recent trial victory came on March 25, 2014 in Maricopa County Superior Court. Attorney Shah was one of three Attorneys representing the client whose property suffered serious damage caused by a hail and wind storm in 2010.  The damage was clearly covered by their insurance contract. However, the insurance company failed to even properly investigate the property damage before they denied the claim. The insurance adjusters did not even get on all the roofs of the buildings before they determined there was absolutely no damage to the property. After the client repeatedly requested the insurance company reinspect the property they refused. Once the Attorneys were hired, the insurance company re-inspected the property but still wrongfully delayed and denied the full value client’s claim for damage. As a result of the insurance company’s deplorable conduct, for nearly four years the client suffered more than just having to deal with the damage to their property.

Unbelievably, before the Attorneys got involved the insurance company offered 0 (zero) dollars for the damage. The Attorneys then filed a lawsuit against the insurance company which contained two principle counts: (I) Breach of Contract and (II) Bad Faith (also known as “Breach of the Implied Duty of Good Faith and Fair Dealing”). After a seven day trial, the jury returned a unanimous multi-million dollar verdict for the client. The jury heard every excuse the insurance company offered and was not persuaded. In fact, the jury sent a clear message about their disgust with the insurance company’s behavior. The jury verdict included nearly two million dollars in punitive damages intended to deter the insurance company and hopefully others from engaging in this type of deplorable conduct.   After several years of litigation, Justice was finally served.

Attorney Tanveer Shah has helped countless Arizonans who have suffered from devastating effects of their insurance company’s betrayal and bad faith conduct.  These honest policyholders all had legitimate claims that were wrongfully delayed or denied by their insurance company.  If you feel that your insurance company has improperly investigated or wrongfully denied your claim or has failed to pay you the full value of your claim call Viper Law Group, Arizona’s bad faith insurance attorneys today.  Attorney Tanveer Shah is incredibly familiar with the insurance claims process and wrongful denials and is ready to speak with you regarding your case.  Call (480) 566-9445 for a free consultation today.  

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