Tort Claim or Breach of Contract Claim
There are two major types of claims a policyholder can file against an insurance company when it is believed that company has acted in bad faith. In the event of insurance bad faith the insured party may sue his or her insurance company on the grounds of a tort claim and or a breach of contract claim. While these two distinctions are often quite similar there a few major distinctions.
Insurance Bad Faith Tort Claim
A tort is defined as an illegal wrong that involves a breach of civil duty owed to someone else. When you enter into a legal relationship with an insurance company that company has an inherit obligation to act in your best interest. Insurance companies are expected, under penalty of law, to approach all claims in a timely and just manner. If an insurance company fails to do so they are ignoring a civil duty owed to the insured and a tort claim can be filed.
Breach of Contract Claim
The contract between an insurance company and the persons insured carries an “implied covenant of good faith and fair dealing.” This clause exists by operation of law in any and all insurance contracts. If it is believed that an insurance company has ignored this implied covenant they are in breach of contract and may be vulnerable to a breach of contract claim.
The distinction between the two types of claims is significant in terms of damages sought by the plaintiff in an insurance bad faith case. As a matter of public policy punitive or exemplary damages are unavailable in contract claims, but may be available to people filing a tort claim. In other words, in certain circumstances the insured party can seek damages larger than the face value amount of the original policy.
What to do if You Feel Your Insurance Company Acted in Bad Faith
If you or someone you know feels they are a victim of insurance company’s bad faith you may be entitled to reimbursement and damages through a breach of contract or tort claim. RepresentYou.com is here to help. Our panel of Los Angeles attorneys includes a number of experienced and qualified insurance bad faith attorneys. When you call or log on a RepresentYou.com representative will ask you a few questions pertaining to your legal matter. At that point we will refer you to one of our panel member attorneys best sorted to handle your case. Please do not hesitate to call or log on 24 hours a day, 7 days a week so that we can start discussing your insurance bad faith issue today.