An insurance company commits bad faith when it fails to pay a claim in a timely manner or unreasonably denies payment of a valid claim. In 1983, the South Carolina Supreme Court recognized that an insurance contract has an implied covenant of good faith and fair dealing that further strengthens the requirement that the insurance company act honestly and fairly when evaluating an insurance claim. There are several types of bad faith that an insurance company may be guilty of committing, and the specific facts and policy language of each situation must be evaluated closely.
Bad faith claims can be complex and are not easy to pursue, which is why you need a Myrtle Beach bad faith insurance attorney to assist you with the process.
Elements of Insurance Bad Faith in Myrtle Beach
In order to succeed in an insurance bad faith claim, you need to prove certain elements. These include:
- There is a mutual binding contract between plaintiff and defendant in existence;
- The insurer refuses to pay benefits under the contract;
- Results from insurer’s bad faith or an unreasonable action that is a breach of the implied covenant of good faith and fair dealing in the contract; and
- That bad faith or unreasonable action caused damage to you (the insured).
The law in South Carolina does state that an insurer cannot be held in bad faith for a refusal to pay out on an insurance policy if there is a reasonable basis for objecting to or denying the insured’s claim. If an insurance company does deny a claim, the question of whether or not an objectively reasonable basis for the denial existed will depend on the particular circumstances of the incident on which the denial was issued.
What Constitutes a Bad Faith Action?
South Carolina Code Annotated Section 38-59-20 defines the actions that constitute bad faith by an insurer who offers property and casualty insurance, marine insurance, surety insurance, or title insurance. These actions can constitute improper claims practices:
- Failure to acknowledge, with reasonable promptness, important communications regarding any claims that arise under its policy, which includes third-party claims under liability policies.
- Knowingly misrepresenting to either insured or third-party claimants any pertinent facts or policy provisions that relate to coverage issues, or disseminating misleading or deceptive information in regard to the coverage under the policy.
- Not adopting or implementing reasonable standards for promptly investigating and settling claims, which includes third-party liability claims, as well.
- Offering to settle a claim, which can include a third-party liability claim, for less than what is reasonably due or payable based on a chance that the policyholder or claimant would be required to incur attorney fees in order to recover the amount reasonably payable or due.
- Compelling a policyholder or third-party claimant under a liability policy to initiate a lawsuit in order to recover money that is due or payable with respect to claims under its policies by offering an amount that is substantially less than what is ultimately recoverable through a lawsuit or settlement with an attorney.
- Threatening to invoke or invoking a policy defense, or rescinding the policy as of its inception, in bad faith, for the primary purpose of reducing or discouraging a claim, including third-party liability claims.
Retaining a Myrtle Beach Bad Faith Insurance Attorney
Evaluating whether your claim was wrongfully delayed or denied requires a detailed and in-depth analysis of the actions taken by the insurance company during its evaluation process. This is why you need to speak with a Myrtle Beach bad faith insurance attorney who can advise you of your rights and help you through this process. At The Derrick Law Firm, we focus on personal injury matters and bad faith claims. For a free case review, contact one of our convenient office locations today to schedule an initial consultation.