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About Insurance Laws in Washington

What is insurance bad faith?

Insurance companies have a duty of good faith and fair dealing and commit bad faith when they unreasonably handle the claim of a policyholder. The purchase of an insurance policy entitles you to the full benefits provided by the policy when you make a valid claim that is covered under the policy. Typical examples of insurance bad faith include:

  • Failure to conduct a reasonable claims investigation
  • Failure to conduct a timely claims investigation or adjustment
  • Wrongful denial of coverage
  • Unreasonable delay in payment
  • Unreasonable underpayment of a claim
  • Failure to negotiate in good faith
  • Failure to settle within policy limits
  • Failure to defend a policyholder sued under a policy provision for liability coverage
  • Wrongful denial of coverage
  • Unreasonable delay in payment
  • Unreasonable attempt to underpay a claim

Any of the above can potentially be cause for a bad faith insurance claim.

What should I do if my insurance company has denied or delayed my payments?

It is in your best interest to seek legal advice as soon as possible. Depending on your policy and the actions taken by your insurance carrier, some claims can be handled quickly, while others may require legal action against the insurance company.

What are my possible remedies for a bad faith claim?

Washington State law can be tough on insurance companies that have acted in bad faith. Depending on the situation, damages for insurance bad faith, where brought as a bad faith claim or as an Insurance Fair Conduct Act (IFCA) claim may include some of the following:

  • Payment of claims amounts denied by the insurance company
  • Payment of attorneys fees and costs
  • Consequential damages including emotional distress
  • Coverage by estoppel, meaning underwriters will be prohibited from raising even valid coverage defenses and be held liable for an insured's entire claim
  • Costs and attorney's fees
  • Punitive damages that can potentially triple the award

Often, a policyholder simply wants their claim to be fully and promptly paid so that they can move on with their lives. An experienced insurance lawyer can help you determine the best way to achieve a fair result based on the specifics of your claim and the insurance company's conduct.

How long do I have to file an insurance lawsuit?

There are many factors to consider in determining the statute of limitations in a bad faith claim. It could depend on whether the action is being brought under contract or tort law and if any clauses exist in your policy limiting the time frame to bring an action. It is wise to consult with an experienced insurance lawyer in Seattle, WA as soon as possible to ensure you do not overlook any important deadlines.

My insurance company is asking me for more information after I made a claim. What should I give to them?

Most insurance policies contain a cooperation clause that states you must comply with all reasonable requests made by your insurance carrier. Though it is critically important to provide the insurance company all of the information that they are requesting that is necessary to process your insurance claim, sometimes it can be hard for a policyholder to determine whether the insurance company's request is reasonable. In fact, sometimes insurance companies use the request for additional information as a tactic to delay or to pressure the policyholder. In that situation, it is strongly recommended that you seek the advice of an experienced insurance law firm in Seattle at the first indication that your claim is not being investigated or paid in a reasonable, timely manner.

My insurance company has requested that I attend an examination under oath. What is that? Should I go?

An examination under oath (EUO) is a way for the insurance company to ask you questions under oath during the insurance claim investigation without any litigation. An EUO is generally recorded by a court reporter such that every word spoken is put into a transcript. The EUO is usually conducted by an attorney representing the insurance company. The EUO can last up to a full day.

Because a policyholder has a duty to cooperate, it is vitally important that you not ignore a request for an EUO. This process should be taken very seriously as it will likely influence the insurance company's claim decision. It is also important to try to gather all of the information that is usually requested in conjunction with the EUO request. If you have any questions about an upcoming EUO, please give our Seattle insurance attorneys a call.

My insurance company has denied my claim. Should I continue to pay my premium?

This is a question best discussed with an insurance attorney, as it depends on your coverage and the reasons given by your carrier for denying the claim. It may appear unfair to continue paying premiums after your claim has been denied, but it might be in your best interest to do so. Our Seattle, WA insurance attorneys will review your policy and advise you whether payment of premiums should be continued.