Insurance Bad Faith

When an insurance company violates its duty of good faith and fair dealing, insured people can pursue an insurance bad faith lawsuit against their insurance company to receive compensation and justice.

In Oklahoma, the law says there is an implied covenant of good faith and fair dealing in every insurance policy. The insurance policy is a contract. Oklahoma law says that an insurance policy is a promise – a promise of protection by the insurance company. Good faith means the insurance company is required to act with honest intent and without taking advantage of insured people. When the covenant of good faith and fair dealing is broken, this is known as insurance company bad faith. Acting dishonestly to take advantage of insured people exposes the insurance company to bad faith liability. One way to establish that an insurance company has acted in bad faith is to look at the Unfair Claims Settlement Practices Act. Oklahoma law outlines what is considered an unfair claims settlement practice.

Here are some examples of how an insurance company commits bad faith against insured people:

Failing to fully disclose provisions that are important to the claim
Misleading the insured person
Misrepresenting facts or circumstances
Failing to promptly investigate a claim
Failing to promptly evaluate the claim

In Oklahoma, an insured person alleging insurance company bad faith must prove:

the person was covered under the insurance policy;
the insurance company's actions were unreasonable under the circumstances;
the insurance company did not deal fairly and in good faith with the insured person; and
the violation by the insurance company of the duty of good faith and fair dealing was the direct cause of the insured person's damages.

For example, an insurance company may fail to fully disclose coverages in the hopes its insured person does not make a claim. Many insureds have Uninsured/Underinsured Motorist Coverage (“UM”). In fact, the insurance company is required to offer you this coverage and obtain your signed rejection if you do not want this coverage. UM coverage is supposed to protect the insured person when the insured person is involved in an accident and the at-fault party does not have sufficient liability coverage to compensate for the injuries and damages the insured person sustained. Many insured people contact their insurance company after they are involved in an accident that is not their fault. The insurance company is required to advise you as to whether you have UM.

Another example of insurance coverage that the insurance company may try to hide is Medical Payments Coverage (“MPC”). Many insured people pay for MPC but do not fully understand what it covers or when it is available. MPC is supposed to pay for the insured person’s medical bills, up to the applicable insurance limit, that result from an accident. MPC is available to insured people whether the insured person is not at fault for the accident.When an insured person is involved in an accident, whether they are at fault or not, the insurance company must advise the insured person that they have MPC. Insurance companies have been known to illegally hide MPC in hopes that an insured person does not make a claim. This bad faith behavior exposes the insurance company to bad faith damages.

Has the insurance company committed fraud? In some instances, an insurance company commits fraud in addition to bad faith. There are two types of fraud in Oklahoma, actual fraud and constructive fraud. Actual fraud is the intentional misrepresentation or concealment of a material fact, with an intent to deceive, which substantially affects another person. Constructive fraud is a breach of a legal or equitable duty to the detriment of another, which does not necessarily involve any moral guilt, intent to deceive, or actual dishonesty of purpose. Morris v. McLendon, 1933 OK 619, 27 P.2d 811; Faulkenberry v. Kansas City Southern Ry. Co., 1979 OK 142, ¶4, 602 P.2d 203, 206. Even an “innocent” misrepresentation can constitute constructive fraud. Id.

Even if the insurance company advises its insured person of all available coverages, it is illegal for the insurance company not to fully investigate and evaluate the insured person’s claim.

This can happen when the insurance company does not obtain all relevant records related to the insured person’s injuries and damages, or simply refuses to acknowledge and account for the insured person’s full injuries and damages. Many times the insurance company illegally refuses to consider future pain and suffering, treatment, and medical bills. This is bad faith in Oklahoma.

Insurance companies are supposed to protect people. Their whole function is to be there for their insured people when something goes wrong – a car accident, a fire, a tornado, loss of limb or life – the list goes on. Insurance companies MUST act in good faith to protect their insureds. When an insurance company violates the covenant of good faith and fair dealing, insured people can pursue a lawsuit to receive compensation and justice.

The insurance companies have lawyers. So should you.

The insurance company bad faith lawyers at Toon Law Firm know how to handle the insurance companies. We have the knowledge and the experience to make them pay. Our lawyers have helped Oklahomans recover millions of dollars against insurance companies for violating the duty of good faith and fair dealing. If you have questions about insurance company bad faith law in Oklahoma, we have the answers.

918 477 7884