Bad Faith Insurance: Policy Holders Fight Back, Win Big

West Palm Beach, FLWelcome to the new world of bad faith insurance, where you can pretty much expect your insurance companies to nickel-and-dime your claim, try to get out of paying less and in many cases, denying your claim altogether.

And don't even talk about rates. No, don't go there.

But also a part of the new world of bad faith insurance, are the number of people who are fighting back and taking their insurer to court over what policyholders determine to be legitimate claims. Many people are winning sizeable awards.

On May 14th of this year a jury in Raleigh County awarded Jackie Adkins U.S. $455,000 after he took his insurer to court over a rear-end collision that occurred in 1999. Adkins was a defendant in the original case and a sizeable award was levied against him. His insurer, Horace Mann Insurance Co, refused to pay. But Adkins fought back, accusing his insurer of not adequately defending him during the original litigation. In the end, the jury ordered Horace Mann to pay not only the original judgement plus interest in the amount of U.S. $280,000, but also awarded Adkins $25,000 for annoyance and inconvenience, and assessed the insurance company $150,000 in punitive damages.

The award was U.S. $2.8 million for a Louisiana couple after their home was devastated by Hurricane Katrina. Their insurer, Allstate, had argued that most of the damage caused to the couple's home was the result of wind-driven surges of water - which are not covered in the policy - and paid the claim according to their (Allstate's) interpretation of the facts.

Homeowners Robert and Meryl Weiss disagreed, and sued Allstate for acting in bad faith. The Weiss' contended that Allstate did not correctly adjust their claim, and underpaid them for structural damage to the home. At trial, the jury agreed and assessed the large settlement, including a penalty of $1.5 million for delayed payment.

In West Palm Beach, a jury awarded a Florida man U.S. $10 million in a case involving a horrific car crash that claimed the lives of his two sons. After State Farm refused to pay a $10,000 claim for his one son who was not driving the car (the limit on the policy) Charles Turner Sr. of Boca Raton sued State Farm for bad faith practices.

It appears as though State Farm, in trying to save $10,000, will instead pay $10 million. The decision will be appealed.

Americans buy insurance to protect their assets, and pay their premiums in good faith. Insurers, in turn, gleefully take your money hoping, as do you, that nothing bad will ever happen - and therefore the only thing they've done for your dough is to mail out a statement every year. Essentially, you're paying for a promise: that if disaster strikes, they'll do what they're supposed to, and you'll be okay.

After all, you're not asking for the moon. All you're asking for is what you are entitled to from your policy. Sadly, more and more insurers, while never having to fight with you over paying them, will fight with you when, and if, it comes time to pay you.

What do you do?
Keep a record of everything - conversations, phone calls, and your premium payment history. Check in with your State department of insurance, which is regulated in the U.S. by state, and each state carries its' own policies with regard to insurance. If you're making a claim, make sure you file it with your state representative with jurisdiction regarding insurance, so your claim is on record.

Small claims court is an option if the disputed amount falls within the limits for small claims in your state. However, depending upon the differential between what you are seeking and what your insurer is offering - if anything - you may have no recourse but to pursue the matter in a higher court, and seek the services of a qualified lawyer.