Does New York Have a Bad Faith Insurance Law?

Insurance companies are not known for being easy to deal with. Many claimants end up having their claims denied, sometimes for less than honest reasons. Contact an attorney if you believe an insurance company has wrongfully denied or otherwise duped you.

New York has no specific statutes regarding bad faith dealings of insurance companies. However, you can still take legal action against insurance companies who are less than honest or negligent in how they conduct business. The requirement to act in good faith is based in common law and implied in all contracts with insurance companies. Examples of bad faith might include failing to properly investigate a claim, unreasonable or unnecessary delays, or denying a claim without explanation. Our legal team can help you sue the insurance company for the compensation you would have received had your claim been approved and other costs you might have incurred along the way. Talk to a lawyer soon, as your policy might limit your time to file a claim for bad faith.

Reach out to our New York personal injury attorneys for a free, private case evaluation by calling The Carrion Law Firm at (718) 841-0083.

New York’s Laws on Bad Faith Dealings by Insurance Companies

New York has no specific law or statute about bad-faith dealings by insurance companies. However, that does not mean that people wronged by insurance companies have no legal recourse. When insurance companies act in bad faith, and claimants suffer, you can sue the insurance company to compel them to pay out according to your policy.

A covenant of good faith is implied in all contracts, including insurance policies. Although no specific law prohibits bad faith dealings, insurance companies are still required to act in good faith when establishing contracts and selling insurance policies to customers. Our New York personal injury lawyers can help you review your policy and determine if the insurance company acted in bad faith when they denied your claim.

The implied duty of an insurance company to act in good faith requires that they act honestly and play fair when negotiating with customers. If a customer files a claim, the insurance company must investigate appropriately and do its best to approve the claim and pay compensation or deny the claim based on fair and reasonable grounds. Acting in good faith also requires that the insurance company act with transparency, meaning they cannot hide how they make their decisions or otherwise act deceptively.

Examples of Bad Faith Insurance Practices in New York

Since there is no exact law or code regarding bad faith and insurance companies, it can be difficult to know exactly when an insurance company is acting in bad faith. There is no single way to define bad faith, so speaking to an attorney immediately is important if you believe an insurance company is not playing fair.

One example of bad faith by insurance companies is denying a claim with little to no explanation. If an insurance company denies a person’s claim, it is required to send a denial letter explaining the decision. This is related to the implied duty of acting in good faith and being transparent. Not only must the insurance company explain why your claim is denied, but it must also inform you of your option to appeal the denial.

Another example of bad faith is when insurance companies cause unnecessary or unreasonable delays when processing your claim. This is an underhanded tactic insurance companies sometimes use to wait out desperate claimants. When the insurance company finally offers a paltry settlement, customers who have been kept waiting might accept a low settlement or give up.

Bad faith also occurs when insurance companies knowingly try to lowball claimants with insufficient settlements. The insurance company is likely relying on the claimant not knowing how much their claim is truly worth and being too intimidated to push back.

Damages You Might Recover in a Bad Faith Insurance Case in New York

When you file a lawsuit against an insurance company for bad-faith dealing, your damages may include a whole host of losses. First, we should claim the true value of your claim that the insurance company should have paid. Next, we can claim the cost of any other losses you might have incurred while waiting for your claim or taking legal action.

First, have an attorney review your insurance claim. When we file a case for bad against the insurance company, we can claim damages equal to what you should have paid according to your insurance policy. For example, suppose you filed a claim for $20,000 in damages after a car accident that is clearly covered by your policy, but the insurance company denied you without explaining or any transparency. In that case, we can sue for the $20,000 you should have received. Essentially, the court may compel the insurance company to adhere to the terms of your policy and pay you what you are owed.

You can also claim damages related to costs you might have incurred because of the insurance company’s bad faith. For example, because the insurance company caused unreasonable delays in your claim, you had to pay for various expenses out of pocket. You might even claim the legal fees you incurred to make the insurance company adhere to your policy terms.

When You Should Take Legal Action for a Bad Faith Insurance Claim in New York

According to I.S.C. Law § 213(2), the statute of limitation for cases involving a breach of contract is 6 years. Insurance policies are contracts between insurance companies and customers. When insurance companies act in bad faith, they often violate the terms of the policy and are in breach of contract. Your 6-year time limit begins to run when the insurance company first breaches the terms of the policy.

The statute of limitation only applies in cases where a contract does not specify a deadline. Often, contracts contain details about when parties may take legal action if the contract is breached. Your policy is the contract between you and the insurance company. Review your policy with an attorney to determine when you must file a claim related to bad-faith dealings by the insurance company. There is a good chance your policy imposes a much shorter time limit for taking legal action, so you should act fast.

Contact Our New York Personal Injury Attorneys for Assistance

Reach out to our Queens personal injury attorneys for a free, private case evaluation by calling The Carrion Law Firm at (718) 841-0083.