Many people in New Jersey rely on insurance after an accident and expect to be treated fairly by their insurance company. However, our lawyers know this is not always the case, as some insurance companies unreasonably deny or frustrate the recovery process for injury victims.
Fortunately, our team can help you file a lawsuit against your provider if they are dealing with you in bad faith. Your insurance company has a duty of good faith to acknowledge and process your claim and can be held liable when they do not. Perhaps your insurance company misrepresented the amount of your damages or did not bother to investigate. We will gather evidence that shows exactly how you were the victim of bad faith insurance practices.
To get your free case review with our New Jersey personal injury attorneys, call Agrapidis & Maroules, P.C., today at (201) 777-1111.
When Can You File a Lawsuit in New Jersey Against an Insurance Company that Acts in Bad Faith?
Some New Jersey insurance companies act in bad faith when dealing with claims made by their insureds, or customers, related to personal injury. If you were treated unfairly by an insurance company, our NJ bad faith insurance attorneys can explore ways to hold them accountable in a lawsuit. A few NJ laws give victims of bad faith conduct a right to sue their insurance company, but only under certain conditions. Below is an explanation of the methods that will allow you to sue an insurance company for bad faith:
Claims Under the Unfair Claims Settlement Act
Most people believe insurance companies should act with good faith when processing and settling claims. In 1993, the Supreme Court of New Jersey agreed with this belief in Pickett v. Lloyd’s and held that insurance companies in the state have a legal duty of good faith and to deal fairly when administering first-party claims. If your insurance company does act in bad faith toward the insured, they can be held liable.
However, the Unfair Claims Settlement Act (UCSPA) only makes unfair and deceptive insurance practices illegal. It does not actually create a cause of action for bad faith. Instead, Pickett gives you the right to file a common law bad faith lawsuit against your provider. The UCSPA can still be helpful, though, since it contains multiple examples of insurance misconduct under N.J.S.A. § 17:29B-4 that can be used as proof of bad faith in your case
We can also file a lawsuit for breach of contract when your insurance company uses unfair practices. An insurance policy is a contract between the company and the policyholder. You pay monthly insurance premiums in exchange for protection from the insurance company when something goes wrong. If an insurance company does not reasonably attempt to settle a claim or frustrates the process, they are in breach of the terms of the policy and, thus, breached their duty of good faith. As such, a breach of contract lawsuit can be filed against the provider, using their bad faith conduct as grounds to argue the breach.
However, these lawsuits only apply to cases against your own insurance company. You do not generally have a contractual relationship with a third-party insurance company with which you do not have a policy.
For instance, suppose you were injured in a friend’s car and filed with their auto insurance or made a claim with a store’s insurance company after slipping there. You are not the policyholder, so the insurance company would only owe a duty of good faith to the friend or store, not you. In these situations, we can file a personal injury lawsuit against the party responsible for causing the damages even if we cannot file a breach of contract lawsuit against the insurance company. However, we must prove that your injuries are serious, as defined by § 39:6A-8(b), to file a lawsuit against a negligent party.
Claims Under the Insurance Fair Conduct Act
The Insurance Fair Conduct Act (IFCA), which went into effect in January 2022, also allows you to file a bad faith claim but only extends this right to uninsured or underinsured motorist (UM/UIM) claims with your car insurance company. It does not give a right to file in any other insurance relationships, like against your homeowners or healthcare insurance.
Fortunately, you can file a bad faith lawsuit in a few situations under the IFCA. According to § 17:29BB-3(a), it is considered bad faith to unreasonably deny a claim or unreasonably delay paying benefits, as well as violate the UCSA. “Unreasonable” bad faith practices can take many different forms, so it is best to have our team review your UM or UIM claim to determine if it has been unfairly delayed or denied.
What Are Some Examples of Insurance Company Bad Faith in New Jersey?
As mentioned, § 17:29B-4 of the UCSA provides several examples of what is considered bad faith while processing an insurance claim. Misrepresenting relevant facts or policy provisions is bad faith conduct. This can include outright lying to the victim about their coverage, but it is usually more subtle. In many cases, insurance companies may twist the words in a policy to deny coverage.
Insurance companies also act in bad faith when they do not acknowledge your claim or act reasonably to investigate it promptly. An insurance company is also in violation when it refuses to pay a claim without conducting a reasonable investigation.
Insurance companies are also not allowed to ignore a claim when it is filed. Insurance companies must affirm or deny coverage within a reasonable amount of time after you have provided proof of your losses. It can be evidence of bad faith if they have not adopted and implemented standards to ensure claims are promptly investigated.
Insurance companies also cannot use tactics that leave you no alternative but to file a lawsuit.
Call Our New Jersey Bad Faith Insurance Attorneys Today to Get Justice for Your Unfair Treatment
Contact Agrapidis & Maroules, P.C., at (201) 777-1111 for a free case evaluation with our Jersey City, NJ personal injury lawyers.