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Insurance Claim Denial and Bad Faith in Alabama

Posted on September 15, 2016

Had a legitimate insurance claim denied in Alabama? Discover your options.

Under Alabama law, insurance companies have a duty to fairly and timely adjust claims made. Frequently, especially during times of natural disasters such as tornadoes and hurricanes, claims adjusters are so busy they neglect or deny legitimate claims. The usual remedy for an insured is to sue the insurance company for breach of contract under the policy. In these situations, the insured can claim the benefits that were due under the policy had the claim been properly handled. However, court costs, legal fees and other expenses make these type cases cost-prohibitive.

Bad Faith

On the other hand, if the insurance claim denial is obviously wrong and is made in bad faith (i.e. an intentional and deliberate denial of a claim), then the insured can bring what is known as a bad faith claim. Bad faith means just that…a denial that is intentionally or recklessly made, without regard to the facts. Unlike a garden-variety breach of contract claim, for which only compensatory damages can be recovered, bad faith claims can include recovery for mental anguish and punitive damages. However, the standard or burden of proof is higher. In a bad faith case, the insured must prove that there was no legitimate debate over the claim. In other words, if the insurance adjuster had any “wiggle room” on the claim or any reasonable reason why the claim wasn’t paid, then bad faith does not apply.

Throughout the years, Drake Law firm has handled hundreds of bad faith and insurance denial claims, including some of the following:

  • house fires
  • life insurance policies
  • auto accidents
  • disability policies
  • boat fires
  • water and sewer damage claims
  • medical treatment

If you have been the victim of an insurance company’s failure to properly and fairly adjust a claim, always contact a Birmingham car accident attorney for legal help.