Robert Lewis – August 2, 2013
The state of Arizona allows insured parties to sue insurance companies for bad faith if they deny or delay claim payment without good reason. Consistent with the Unfair Claims Settlement Practices statute, Arizona courts have issued decisions on a number of cases involving insurance companies and their refusal to pay the claims of their insured.
In 1981, Rosemarie Noble successfully sued her medical insurance provider, American Life Insurance Company, for refusing to pay her hospital bill following surgery. Noble v. American Life became a benchmark case for bad faith actions against companies that deny claims without reason. Ten years later, in Clearwater v. State Farm Auto Ins. Co., the court ruled that the insurer must give equal consideration to the interests of the insured when accepting a settlement. In 2000, Zilisch v State Farm Auto directed jurors to conduct appropriate inquiry to determine if an insurer failed to adequately investigate a claim, or knew that an investigation was inadequate.
In every insurance contract there is an implied duty of good faith and fair dealing. In Arizona, you may bring a claim of unfair practice against your insurance company for its negligence or inattentive manner, including but not limited to any of the following:
Your agent misrepresents provisions of your policy
The company fails to respond to your inquiries in a timely fashion
The company fails to properly investigate your claim
The company denies your claim without reason
The company attempts to settle a claim for considerably less than is reasonably proper
The company intentionally offers an unreasonably low settlement in order to provoke litigation
Your company delays investigation or settlement by requiring you to submit a formal claim report containing essentially the same information you have already submitted on a preliminary report requested by the company
In Arizona, if your insurance company acts in bad faith, you might be entitled to recovery of the initial claim, plus punitive damages for any time, inconvenience and suffering caused by the company’s negligence.
via Insurance Bad Faith on Investigation | Lewis and Pokora – JDSupra.