The Options You Have When an Insurance Company Wrongfully Fails to Pay Your Claim

We’ve all heard the amiable jingles or slogans, sometimes recited by popular actors, singers and athletes, telling us about how an insurer will be “on your side” or that you will be “in good hands.” The reality is, though, that insurers often work hard to avoid paying claims, even to their own customers. When that happens to you as a result of an auto accident, you may have various options and, depending on the exact facts of your situation, it may open the door to recovery of substantial compensation. To be ready when that happens to you be sure you have someone on your side… and that that someone is an experienced San Mateo auto accident attorney.

M.M. was one of those unfortunate people whose experience with his insurer was less than cheerful. M.M. was seriously injured in a high-speed head-on collision. The other driver was at-fault, having crossed a double-yellow line to pass slower vehicles.

M.M. survived, but suffered a severe injury that shattered his left heel bone. The injury caused a permanent deformity and was extremely painful. His doctors concluded that he’d face a lifetime of chronic pain and problems related to that heel.

The at-fault driver’s insurer paid M.M. $50,000, the limit of that driver’s insurance policy. Because M.M.’s damages were well in excess of $50,000, his lawyer filed a claim with M.M.’s insurer under M.M.’s underinsured motorist coverage. That coverage had a policy limit of $100,000. Because M.M. had already received $50,000, that meant that the most his insurer was obliged to pay was $50,000.

The insurer didn’t offer $50,000, though. Instead, it offered to settle the claim for a mere $1,000. Over the next several months, the insurer upped the offer to $13,000 and, later, $18,000.

The case went to arbitration and the arbitrator ruled that the insurer should have paid the policy limit (a/k/a the full $50,000.) M.M.’s insurer wrote him a check for $50,000. That was 2½ years after the injured man’s original claim request.

Bad faith by insurance companies may entitle you to punitive damages

So, when an insurer has delayed, sidestepped and stonewalled to avoid paying you what it owes, and you spend many years waiting (and litigating or arbitrating,) it that the end? Can you only get the damages award you should have received in the first place? The answer in California is “no.” The law allows you to sue the insurer for what’s called “bad faith,” and you can potentially recover significant compensation. You can be paid for the mental suffering, anxiety and emotional distress the nonpayment and delay caused you, and you can also recover attorney’s fees that you paid in order for your lawyer to help you get the money you should have had all along.

You can also get punitive damages if you can prove that the insurance company acted maliciously, fraudulently or in a way that was oppressive.

In M.M.’s case, he obtained both types of awards. In addition to the $50,000 claim payment, he was entitled to $313,000 in compensatory damages for mental pain and anguish along with attorney’s fees. On top of those amounts, the court also concluded that he was entitled to punitive damages in the sum of $1 million.

Each case comes twists and turns. And with each set of twists and turns may come options and opportunities under the law. Be prepared for whatever direction your case goes by having legal counsel with the experience you need. The skilled San Mateo personal injury attorneys at the Law Offices of Galine, Frye, Fitting & Frangos are ready to help. Our attorneys have been helping injured people for many years as they take on the insurance companies and others who owe them compensation. To set up a free consultation with one of our knowledgeable attorneys, contact us at 650-345-8484 or through our website.