When a policyholder can show that an insurance company has acted in bad faith, he or she may be able to recover damages for the harm suffered. Obtaining compensation for the wrongs committed by an insurance company is an important step on the road to recovery, so if you have been the victim of your insurance company’s bad faith, contacting an experienced bad faith insurance attorney can help ensure that your interests are protected.
It is also vital for you to know and recognize the types of damages that may occur as a result of bad faith and an insurance company that acts in a way that is unfaithful. A good insurance company will give you the benefit of the doubt and go above and beyond to help you in your time of need.
Consequential damages, also known as special damages, are damages you can prove occurred because of the failure of one party to meet a contractual obligation. These types of damages often go beyond the contract itself and into the actions garnished from the failure to fulfill.
There are a variety of damages that a victim of bad faith insurance practices can recover, aside from the original amount that the insurer should have paid out for the policyholder’s claim, including consequential damages and punitive damages.
Consequential damages are those monetary and other costs accrued by a policyholder as a result of the bad faith actions of his or her insurer. This can be seen as the cost of something that could have been prevented had the insurance company acted as they were supposed to. This may include such various costs as attorney’s fees and the costs of emotional distress. Even something small such as added stress, a physical condition, or small cost can be considered as part of consequential damages.
Punitive damages can be defined as damages that are intended to reform or deter the defendant and others from engaging in conduct similar to that which formed the basis for the lawsuit. A Punitive damages claim may be available if the policyholder can provide evidence that the insurer acted with recklessness or the intent to do harm, which usually requires a showing of egregious conduct. In order to determine whether punitive damages are appropriate, courts consider a series of factors, which include:
- The seriousness of the hazard to the public arising from the company’s misconduct;
- The profitability of the misconduct to the insurer;
- The duration of the misconduct and whether or not measures were taken to conceal it;
- The degree of the insurer’s awareness of the misconduct and of its seriousness;
- The company’s conduct once the misconduct was discovered;
- The number of employees involved in concealing the misconduct; and
- The financial condition of the insurer.
After analyzing the factors, a jury awards punitive damages based upon the insurer’s level of intent. In situations where an insurer’s breach of its fiduciary duties is especially shocking, courts may award large sums to any victims of the misconduct in an effort to deter similar future behavior by other insurance companies.
Contact A Legal Representative
An insurance company’s bad faith or misconduct can have serious financial and emotional consequences for policyholders and their families. If you were injured in an accident or sustained property damage and were subsequently the victim of your insurer’s bad faith, it is important to contact an experienced attorney who can defend your rights and help you obtain the compensation you deserve. Please contact one of our dedicated bad faith insurance attorneys at the Bennett Law Firm at 405-272-0303.