What is “Bad Faith” And How It Applies to Your Auto Accident Compensation

The people of this country purchase insurance to protect themselves in case of an accident. The state of South Carolina requires all drivers to have car insurance for this reason. Yet what happens when an accident occurs and the car insurance company refuses to perform their duty and obligation? This is what is called “bad faith,” and it can have a detrimental effect on your ability to get compensation for an accident.

First Party Bad Faith

In a first party bad faith insurance lawsuit, the insured party may make a claim for their own losses based on their policy. If it is bad faith insurance, the insurance company will deny the claim without basis or possibly even without investigation. For example, if you hit a light pole and file a claim but the insurance company never sends out an adjuster or fails to respond to your correspondence, this could be a bad faith insurance claim.

Third Party Bad Faith

With a third party bad faith insurance claim, the party harmed is not the insurer. In these situations, the insured party is the one responsible for the accident. The insurance company is required to pay for the third party’s losses up to policy limits. But if the insurance company refuses to pay for any reason, or they refuse to investigate, this can constitute third party bad faith.

What You Can Do

When the insurance company you paid for a policy fails to meet its obligations to you or a third party that should be covered by your policy, you need to take action. Your financial losses without an insurance payout could be significant, even leading to bankruptcy. It is important to fight the insurance company and hold them accountable. To do this, you will need to hire an experienced attorney.

If you have been having problems with an insurance company not wanting to pay a covered claim, contact us today for more information or to schedule your free consultation.