Charges of “Bad Faith” can be Eliminated by Adjusting all Claims in a Detailed and Fundamentally Sound manner
Videos describing important insurance issues described by Barry Zalma and available to anyone who views or subscribes to the YouTube account. Issues include insurance fraud, definition of insurance, insurance as a contract of personal indemnity, millions for defense and not a dime for tribute and the tort of bad faith. Please subscribe. There are now more than 62 videos at https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw/videos. I have had some difficulty posting new videos to my YouTube channel at https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw/videos where you can still see about 62 videos, and have decided to post all future videos on insurance, insurance claims, insurance law, and insurance fraud to this my blog, https://zalma.com/blog.
Over the last 52 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it for insurers and their claims staff to become insurance claims professionals.
HOW TO AVOID CHARGES OF BAD FAITH
People insure themselves for peace of mind and security. To protect these interests it is essential that an insurer fully inquire into the possible bases that might support the insured’s claim and act promptly.
The insurer may not gather just enough evidence to support a belief that the policy does not provide coverage and then quit the search.
Furthermore, the adjuster must:
- know the state’s Unfair Claims Settlement Practices Act and the Regulations created to enforce the act. Following the statutory guidelines can support a defense to allegations of bad faith;
- send reservation of rights letters and formal denials of coverage to an insured as soon as possible;
- make sure there is a reasonable factual and legal basis before denying coverage
- respond to the insured’s requests for clarification of those rights. [Carolina Bank & Trust Co. v. St. Paul Fire & Marine Co., 279 S.C. 576, 310 S.E. 2d 163 (Ct. App. 1983)].
The adjuster should ask counsel to check recent federal and state court decisions to determine whether any of the policy provisions relied on to deny the claim have been held invalid in the state where the loss occurred.
The investigator must not:
- resort to fraud, deceit, or misrepresentation to gain information from a person being investigated. Unruh v. Truck Insurance Exchange, 7 Cal. 3d 616, 102 Cal. Rptr. 815 (1972);
- eavesdrop, trespass on the insured’s property, shadow the insured, or participate in any other form of harassment without good cause. Pinkerton National Detective Agency, Inc. v. Stevens, 108 Ga. App. 159, 132 S.E. 2d 199 (1963);
- destroy evidence supporting the insured’s claim for benefits. Upthergrove Hardware, Inc. v. Pennsylvania Lumbermans, 146 Wis. 2d 470, 431 N.W. 2d 689 (1988);
- making threats of dire consequences to force the insured to agree to an unfair settlement; or
- failing to appropriately advise a claimant of their rights under the law, including any relevant statute of limitations.
The only way for an insurer to avoid an action being brought for statutory bad faith in Florida is set forth in section 624.155(2)(d). It follows that an insurer cannot escape liability for a violation of section 624.155 by the simple expedient of a belated payment of the policy limits after the 60 day time period provided in section 624.155(2)(a) has expired. The belated payment by the insurer neither automatically proves nor disproves first party bad faith. The insured must still establish that the insurer’s failure to pay the policy limits by the expiration of the 60 day window period constituted bad faith as defined by statute. The sixty-day window is designed to be a cure period that will encourage payment of the underlying claim, and avoid unnecessary bad faith litigation.
© 2020 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and firstname.lastname@example.org.
Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.
Over the last 52 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.
Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts
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