New Mexico Bad Faith Insurance Litigation
Bad faith insurance is a legal term used to describe a tort claim that an insured person has against an insurance company. Over the years, bad faith insurance litigation has defined exactly what an insurance company’s obligation of good faith is to their insured.ere.
Unfortunately, however, According to the National Association of Insurance Commissioners (NAIC), an insurance company’s handling of an insurance claim is the most common complaint from policyholders, followed by the insurance company’s delays in paying a claim, denial of a claim and unsatisfactory payments on claims.
In New Mexico, bad faith litigation can result in monetary compensation for the loss suffered by the policyholder and often punitive damages are awarded against the insurance company to punish it. The New Mexico Insurance Code provides additional remedies, in addition to the traditional common law bad faith lawsuit. Included here are lawsuits for violations of the Unfair Insurance Practices Act, which allows policyholders/insureds to seek compensation for their losses, attorneys’ fees, costs, and often treble (triple) damages if the Act is explicitly violated by the insurance company.
Because of litigation insurance companies are prevented from misrepresenting benefits about the policy to their insured; and this is the case across the board, as numerous types of insurance have been the subject of bad faith insurance litigation, including disability insurance, life insurance, auto insurance, health insurance and property insurance.
When an Insurance Company Won’t Pay Benefits
Bad faith is when a duty is broken to an insurance company’s policyholder because the insurance company won’t pay, or fails to perform some mandatory duty to its insured.
Often they are not physically or mentally capable of letting you know what is happening. If that is the case, it is up to us to keep an even closer eye on our loved ones to assure their safety. Furthermore, nursing homes and hospitals are amongst some of the most highly regulated entities in the state. Notwithstanding this fact, patient abuse occurs at alarming rates, and victims are often unable to communicate the conditions of their torture to their loved-ones. You wanted nothing but the best for your loved-one when you sought care for them, and you shouldn’t be expected to stand by as they spend the last fragile years of their lives in pain or discomfort. People hire many different kinds of lawyers for many different reasons. If you or a loved one suffered injuries or death because of nursing home neglect, please, stand up for human dignity, and fight the hard fight by holding the facility accountable. We strongly encourage you to call us for a free preliminary discussion of your rights and possible representation in your case. We can help you understand the law, and your rights under it, including who can sue on behalf of a loved-one and when punitive damages might be appropriate. If you do in fact suspect nursing home negligence, you must first and foremost get medical help for the victim, if needed.
Know Your Consumer Rights
If an insurance company won’t pay, it is important to know your consumer rights and seek legal counsel. When it comes to insurance claims, keeping records from your accident or incident is crucial. Records include receipts, expense assets, and other documentation. Know your insurance policy, as it pertains to exactly what is covered, what steps you need to take when filing a claim, the timeframe in which a claim must be submitted, and the process of estimating damage reimbursement. When an insurance company won’t pay, it is advisable to seek a lawyer’s assistance.
Types Of Policies
Most commonly, insurance companies won’t pay under accident and health insurance policies for reasons that are unacceptable in the field. The next biggest offender is auto insurance, with homeowners, then life, and annuity generally acting in good faith. According to the National Association of Insurance Commissioners (NAIC), the handling of an insurance claim is the most common complaint from policyholders, followed by the insurance company’s delays with receiving a claim, denial of a claim and unsatisfactory claim amounts.
Unfair Claim Settlement
Unfair claim settlement practices by insurance companies are considered bad faith, including:
- Misrepresentation of policy provisions or pertinent coverage facts
- Failure to act with reasonable promptness in response to a claim
- Failure to adopt and implement reasonable standards for investigation of a claim
- Failure to approve or deny coverage of a claim
- Failure to settle a claim when liability is clearly established
- Failure to protect the assets of the policyholder being sued
- Attempting to settle a claim for less than the amount the policyholder is entitled or undervaluing a claim
- Abusing the arbitration process
- Unfairly raising premiums; wrongfully canceling, or failing to renew a policy.
If you believe you have been the victim of bad faith denial of a claim and your insurance company won’t pay, you should do your best to learn more about your legal rights by seeking the help of a lawyer.
Bad faith lawsuits can result in a large monetary compensation of punitive damages, due to the wrongful nature of the conduct involved. This is because your insurance company has a duty to treat you fairly, protect you from third-party claims, and to properly negotiate the claim for you.
When an Insurance Company Fails to Defend
Another example of a bad faith insurance claim is when an insurance company fails to defend the policyholder.
In the case of an individual, couple or family who pays premiums to an insurance carrier, it is that carrier’s legal duty to act in a good faith. Bad faith practices occur with all types of insurance, including life, auto, property, and business.Unfair claim settlement practices, by insurance companies, are considered bad faith, including:
- Misrepresentation of policy provisions or pertinent coverage facts.
- Failure to act with reasonable promptness in response to a claim.
- Failure to adopt and implement reasonable standards for investigation of a claim.
- Failure to approve or deny coverage of a claim.
- Failure to settle a claim when liability is clearly established.
- Failure to protect the assets of the policyholder being sued.
- Attempting to settle a claim for less than the amount the policyholder is entitled or undervaluing a claim.
- Abusing the arbitration process; unfairly raising premiums.
- Wrongfully cancels or fails to renew a policy.
If you believe you have been the victim of bad faith denial of a claim, it is important to learn more about your legal rights, as a consumer.
When An Insurance Company Must Defend
Bad faith insurance law requires that insurance companies uphold their fiduciary duty to act in good faith and fair dealings involving their policyholders. Bad faith can result from first-party coverage for personal injury, including health or life insurance.
In the case of third parties, the carrier must defend a lawsuit if it is not covered by the policy unless the defense costs exceed policy limits. Secondly, the insurance company has a duty of indemnification, to pay a judgment against the policyholder up to the limit of coverage. Good faith and fair dealing principles imply that insurers have a responsibility to policyholders to act in the best interest of their client. When this obligation is not met, the insurance company is in breach of contract and may be held responsible for resulting damages. In the case of a bad faith insurance claim, the legal ramifications include the policyholder’s right to pursue a civil lawsuit for restitution. In addition, punitive damages may also be awarded. The bad faith insurance laws depend upon the type of insurance, specific bad faith practices alleged, and jurisdiction where the practice took place, amongst other variables.
Hiring a Bad Faith Insurance Attorney
If an insurance company acts in bad faith, contacting an attorney can help you navigate your way through the legal process. Because of the complex nature of insurance bad faith lawsuits, it’s important to consult legal counsel to learn more about your rights.
If an insurance company breaks the law, the policyholder can collect more than what is contractually owed under the policy, through a bad faith insurance claim. Damages caused by unreasonable denial of benefits or unreasonable delay in processing the claim can include economic loss, attorney fees, and emotional distress.
If the insurance company acts in an outrageous or malicious manner, then punitive damages can also be awarded at the court’s discretion. Failure to provide proper investigation or valuation of the damaged property in question or refusal to acknowledge a claim is also considered bad faith. The New Mexico insurance code provides comprehensive regulation of the insurance industry and policies to protect insurance policyholders. If you believe you have a bad faith insurance claim, you should talk to an attorney to make sure your rights, and potential case, are protected.
Further Insurance Litigation Information
Keeping Current with Insurance Laws
Every person operating a motor vehicle on public roads agrees to drive in a safe manner, and pay for any harm caused by their negligence.
Unfortunately, not every driver on the road acts in accordance with this duty, and ensures their own responsibility for their actions through purchasing insurance. The legislature of New Mexico is aware of this problem, and enacted N.M. Stat. Ann. § 66-5-301 as a means of protecting those drivers who responsibly seek insurance by requiring that insurance companies provide an option to drivers to purchase uninsured or underinsured motorist coverage, on top of the state-mandated liability coverage.
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