Insurers who unreasonably deny claims or fail to protect and defend their policyholders from claims filed by others are considered to be acting in bad faith. However, there are bad faith insurance laws individuals can rely on if they are in conflict with their insurer. Louisiana insurers who have been accused of acting in bad faith may have legal recourse and should consider their legal options.
Insurance companies have various duties to their policyholders. If they fail to fulfill these obligations, the situation may qualify as bad faith. Some of their most important duties include conducting a proper investigation, providing the findings of the investigation and paying the judgement rendered against the policyholder or a mutually agreed upon settlement agreement. Insurers are also required to provide an adequate defense for the policyholder against claims that are filed against them, even in situations in which the majority of the lawsuit is not included in the policy. Policyholders should also expect their insurers to settlement claims reasonably and not refuse to enter a settlement agreement in order to possibly limit their liability at a trial.
Insurance companies who have committed acts of bad faith may be held financially liable for their actions. The procedure an individual should follow to file a lawsuit against their insurance company will depend on the laws of the jurisdiction in which they reside. Claims filed against insurers for acts of bad faith may take the form of a breach of contract case or a tort case.
An attorney who practices insurance law may assist insurance companies with resolving disputes with other insurance companies. Litigation might be used to compel an insurance company to honor the terms of an insurance policy. The attorney may advocate and provide a defense on behalf of insurers during a trial.