When policyholders pay premiums, they expect their insurance companies to act in good faith and promptly investigate and pay valid claims. Unfortunately, that doesn’t always happen. In this article, we’ll break down…
Generally speaking, an insurance company acts in bad faith when its conduct toward a policyholder is unreasonable or vexatious. This can include deliberate, unfair, or dishonest behavior such as unnecessary delays, unreasonable denials of valid claims, or lowball settlement offers. Essentially, when an insurer fails to handle a claim in a fair and timely manner, it may be engaging in bad faith.
The most common examples typically involve unreasonable delays. This occurs when an insurance company, despite its duty to investigate and process claims promptly, delays either during the investigation or while issuing payment.
Another frequent issue is unfair denials. Some insurers seem to deny claims as a matter of routine, often without conducting a proper investigation or offering a clear explanation. In some cases, claims that obviously fall within the terms of the policy are denied with little or no justification.
A third type of bad faith involves failure to defend or settle third-party claims. For example, if you’re involved in a car accident and submit a claim under your policy, your insurer is generally required to provide you with a defense, including hiring an attorney at no cost, and to handle settlement negotiations in good faith. Too often, insurers fail to do either, delaying or denying coverage altogether.
Craig Donnelly of Donnelly Law LLC has built a reputation for holding insurers accountable and protecting policyholders’ rights.
He has successfully represented countless individuals and businesses in cases involving unreasonable claim delays, wrongful denials, and underpaid settlements. Craig Donnelly’s deep understanding of Illinois insurance law allows him to identify bad faith tactics early and fight for fair outcomes.
If you believe your insurer isn’t treating you fairly, contact Donnelly Law LLC today to discuss your options with an experienced insurance attorney.
Damages in bad-faith insurance cases generally fall into two categories:
This includes the amount you were entitled to under your policy that was improperly denied, delayed, or underpaid. These damages compensate you for your actual financial losses.
In more extreme cases, where the insurer’s conduct is particularly outrageous, a court may award additional compensation. In Illinois, this can be a percentage of the actual damages or a flat statutory amount, depending on the case.
However, it’s worth noting that punitive or statutory damages are less common, as the legal standard for proving bad faith in Illinois is quite high.
It’s rarely too early to consult an attorney. While smaller, straightforward claims, such as filing for a damaged windshield, can often be handled without legal help, more significant claims should be reviewed by a lawyer as soon as possible.
For larger matters, such as storm damage or auto accident claims, early involvement from an attorney can be extremely beneficial. They can help ensure that all necessary documentation is gathered, deadlines are met, and communications with the insurer are handled properly from the start.
A growing trend is delayed claim payments paired with unreasonably low settlement offers. Many insurance companies operate with a primary focus on profitability, collecting premiums while minimizing payouts. Since claim payments reduce their bottom line, there’s an inherent tension between the insurer’s interests and the policyholder’s rights.
As a result, insurers may drag out claims or offer settlements that don’t reflect the true value of the loss. Businesses should be proactive: document all communications with your insurance provider, follow up regularly on claim progress, and seek legal guidance if delays or underpayments persist.
For more information on bad faith insurance in Illinois, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (630) 274-6196 today.
Craig Donnelly of Donnelly Law LLC has built a reputation for holding insurers accountable and protecting policyholders’ rights.
He has successfully represented countless individuals and businesses in cases involving unreasonable claim delays, wrongful denials, and underpaid settlements. Craig Donnelly’s deep understanding of Illinois insurance law allows him to identify bad faith tactics early and fight for fair outcomes.
If you believe your insurer isn’t treating you fairly, contact Donnelly Law LLC today to discuss your options with an experienced insurance attorney.