Bad-Faith Claim
When you file a personal injury insurance claim, you expect the company to treat you fairly and follow the rules. In North Carolina, the law requires insurance companies to handle claims honestly and in good faith. When they do not, you may have a“bad-faith” claim against your own insurer.
Understanding Bad Faith in Insurance Claims
“Good faith” means your insurance company must investigate your claim fairly. It must communicate honestly and make decisions based on the facts and the policy, not just profit. North Carolina law bans “unfair or deceptive acts or practices” in business.
While a simple mistake is not bad faith, certain patterns of behavior are red flags.
Possible warning signs of bad faith include:
- Misstating what your policy covers or omitting key coverage language.
- Ignoring your calls, emails, or letters, or taking an unreasonably long time to respond to your claim.
- Failing to investigate the facts of your loss promptly and fairly before denying or delaying payment.
- Refusing to pay a claim without a reasonable investigation based on all available information.
- Not clearly stating whether your claim will be covered within a reasonable time after you send the required proof of loss forms.
- Making a very low offer that is far below what the company’s own records or experts show is owed.
- Forcing you to file a lawsuit to recover amounts the company should have paid, by repeatedly offering much less than the claim is worth.
- Failing to explain in plain language the real policy reasons and facts behind a denial or “compromise” offer.
If you see more than one of these, especially over many months, it may point to bad faith rather than a simple disagreement. Bad faith may exist in all types of insurance claims, including car accidents, premises liability, property damage, product liability, and medical malpractice.
Proving a Bad-Faith Claim in North Carolina
North Carolina courts recognize a tort claim for an insurer’s bad-faith refusal to pay or settle a valid claim.
To prove this tort, an insured must show:
- The insurer refused to pay after recognizing a valid claim.
- The insurer acted in bad faith, not because of an honest mistake or reasonable dispute.
- There was “aggravating or outrageous” conduct, such as fraud, malice, or willful disregard of the insured’s rights.
In addition to a common-law tort claim for bad faith, there may be claims in contract law and under the Unfair and Deceptive Trade Practice Act. An experienced insurance lawyer can determine the best options based on your case.
What Damages Can I Receive for a Bad Faith Claim in North Carolina?
Depending on the facts and the legal theories you prove, possible damages can include:
Compensatory Damages
These damages include the financial losses you incurred because of the company’s bad faith. Economic damages include property damages, lost wages, out-of-pocket expenses, and medical bills. You may also receive compensation for the legal expenses of pursuing a bad-faith claim and emotional distress.
Punitive Damages
North Carolina allows punitive damages in cases involving malicious, fraudulent, wanton, or willful conduct. These damages “punish” a party for wrongful conduct. Punitive damages also deter future bad-faith practices.
Your actual recovery depends on which claims you bring, what the evidence shows, and how the judge applies these statutes to your case.
Steps to Take if You Suspect Bad Faith
If you believe your North Carolina insurer is acting in bad faith, you can start protecting yourself right away.
- Stay organized. Keep a claim notebook or folder with copies of your policy, letters, emails, phone logs, and photos of damage.
- Communicate in writing when possible. Follow up phone calls with short emails or letters summarizing the discussion and requesting confirmation.
- Ask for explanations. Request a written explanation that ties any denial or low offer to specific policy language and facts.
- Submit missing information promptly. If the adjuster requests records or forms, send them as soon as you reasonably can and keep proof of what you sent.
- Escalate within the company. If you cannot get a straight answer from the adjuster, ask to speak with a supervisor or the claims department.
- File a complaint. You can file a written complaint with the North Carolina Department of Insurance (NCDOI), which helps consumers resolve disputes and watches for patterns of unfair practices.
Remember that NCDOI can try to mediate and may take enforcement action in some cases, but only a court can decide your civil rights and award damages.
Contact a Charlotte Personal Injury Lawyer at Chandler Volta Personal Injury Lawyers for a Free Consultation
If you believe an insurance company has acted unfairly or in bad faith, it is important to understand your legal options. In North Carolina, insurance bad-faith claims may involve overlapping tort, contract, and statutory issues under the Unfair and Deceptive Trade Practices Act.
An experienced attorney can review your policy, evaluate your claim file, and examine the insurer’s conduct to determine which legal theories may apply and what evidence could be critical if your case proceeds to court. Contact a Charlotte personal injury lawyer at Chandler Volta Personal Injury Lawyers today at (704) 980-9999 for a free consultation.