[Music] Welcome to the Millennial Lawyer

Podcast with Mark Shirian. Today for episode 23, we will be talking about your injury, their delay, holding insurance companies accountable for bad faith. So bad faith comes up a lot with respect to personal injury claims. 

A lot of people ask what exactly is bad faith in the context of insurance claims. Uh so bad faith occurs when insurance companies violate its duty to fairly deal with policy holders. So insurance companies are required to investigate claims promptly, evaluate them honestly and pay valid claims without unreasonable delay. Bad faith includes denying claims without proper investigation, deliberately misinterpreting policy language, or making lowball offers knowing the policy holder is desperate.

So, a lot of people ask, how is bad faith different from a simple claim denial? A denial based on legitimate policy exclusions isn’t necessarily bad faith. It’s contract interpretation. Bad faith involves unreasonable conduct, denying a claim they know is valid, failing to investigate, ignoring evidence, or using delay tactics to pressure settlement. It’s about the insurance company putting their interests above their duty to the policy holder. And we see this a lot whether mostly with car accident cases where there’s a limited policy, straight unquestionable liability and substantial damages.

So a lot of times there are a lot of red flags which could suggest that an insurer may be acting in bad faith. And what do we look for in those circumstances? What we watch for are demands for unnecessary documentation, repeatedly changing adjusters frequently, making settlement offers far below documented damages, refusing to explain denials, misinterpreting policy terms, threatening to drop coverage, delaying tactics when liability is clear, and ignoring medical evidence. They’re not returning calls or taking months for simple decisions. That also can be a red flag.

So with respect to New York, can you sue an insurance company directly for bad faith in New York? And the short answer is yes, but it’s complex. First party bad faith, your own insurer allows direct lawsuits. But with respect to third party situations, when it’s someone else’s insurer, that could be a little trickier because you can’t typically sue them for bad faith statutory and common law bad faith claims with different standards and remedies. And the other question that comes up a lot is what type of damages can someone recover in a bad faith case? So beyond the original claim amount, you can recover consequential damages. Losses caused by the delay, like missed medical treatment, lost wages, or foreclosure. Some cases allow emotional distress damages. Attorney’s fees are often recoverable. In egregious cases, punitive damages may apply. The key is showing the insurer’s conduct was a gross

disregard for your rights.

And how do you prove that a delay or denial was intentional or malicious? We look for patterns. Similar claims for others but not you. Internal emails showing bias. Deviation from company guidelines ignoring their own expert opinions. Depositions of adjusters often reveal quotas or incentives to deny claims. Timeline analysis showing unreasonable delays without explanation. Sometimes we find training materials encouraging delay tactics. Another question that comes up a lot is whether bad faith could apply to both car insurance and health disability policies. Absolutely. Any insurance relationship can involve bad faith. Autosurers might lowball property damage or deny injury claims. Health insurers might call necessary procedures experimental. 

Disability insurers are notorious for bad faith, suddenly claiming you’re able to work despite medical evidence. Each type has specific regulations, but the core duty of good faith applies to all. So, my best advice to someone who feels like the insurance company is stalling is to document everything in writing. Send letters by certified mail confirming phone conversations. Create a timeline of all contacts and delays. Don’t accept verbal promises. Get everything in writing. If they request documents, send them immediately and keep proof. Set deadlines in your communications. Consider filing a complaint with the New York Department of Financial Services. Most importantly, consult an attorney early. We can often motivate insurers to act properly just by getting involved. So these are definitely things to look out for when you are dealing with the insurance companies could be leveraged by even threatening them that you might bring a bad faith claim if they do not handle your underlying claim properly. 

So, if you ever have an issue with bad faith or negotiating with the insurance companies, please reach out to Mark David Shirian PC at shirianpc.com and we’ll be happy to assist you as much as we can. 

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