Pursuing a Rhode Island homeowners or property insurance claim can be much more difficult than it should be. Although insurance companies are paid by their clients for the express purpose of providing coverage against a covered loss, once a claim is filed, an insurance company often treats their client as a hostile party. Claims adjusters and the legal teams behind them have a duty to their employers to weed out fraudulent claims; however, incentive programs used by insurance companies often result in all claims initially being treated as if they are unreasonable or fraudulent.
As an insured person who has recently suffered a devastating loss that would result in a property insurance claim, the client is often in an extremely vulnerable and unfavorable position to express their rights under the insurance policy and demand what they are entitled to. Insurance companies know this and will often deny coverage unjustly or make extremely reduced offers to vulnerable clients who need a payout immediately. While the ethics of this practice is certainly questionable, when taken to its extreme, insurance company tactics can have legal implications that all their clients should be aware of.
When the insurance company game of hardball goes from unkind to unethical or illegal, is when a Rhode Island bad faith insurance claim can come into play. Insurance companies have a fiduciary duty to act in the insured’s best interests, which includes a duty to seriously consider a plaintiff’s reasonable settlement demand. An insurance company that wrongfully denies a claim can be sued by their client for acting in bad faith. Insurers can be held accountable for declining to settle a valid claim or for otherwise failing to adequately perform their duties under the insurance contract. A plaintiff who successfully pursues a bad faith claim against their insurance company may be entitled to the original damages under the claim, as well as punitive damages against the insurance company as well as attorney’s fees.