Insurance Bad Faith

Insurance Bad Faith in West Virginia

In West Virginia, like in many other states, the law requires insurance companies to treat people fairly. When an insurance company acts unfairly, deceptively, or puts its own profit ahead of the rights of its policyholders in a manner that is unlawful, it is called bad faith.

An insurance company that is sued for bad faith in West Virginia could be made to pay to the policyholder all amounts due under the policy/coverage at hand, as well as punitive or multiple damages and other relief. At Simmerman Law, we can help you understand and protect your rights if an insurance company has acted in bad faith toward you.

Types of Bad Faith

There are two ways that an insurance company can be held accountable by a policyholder for bad faith under existing West Virginia law.

The first way is under a written law, or statute, that was passed by the legislature and signed by the governor. The law is called the Unfair Trade Practices Act. An insurance company is guilty of unfair trade practices if it violates the statutory and regulatory framework. West Virginia law also includes a list of insurance practices that are considered to be unfair and deceptive trade practices. This list includes, among others, false advertising, coercion, discrimination, lying about important facts or policy terms, refusing to pay claims without an investigation, and unreasonably forcing a lawsuit without attempting to settle with the policyholder.

The second way an insurance company may be held accountable for bad faith is under the history of court opinions where West Virginia courts found insurance companies responsible for wrongdoing. This is judge-made law, also called West Virginia common law. An insurance company can be responsible for bad faith under the common law if it refuses to pay policy benefits after receiving and recognizing a valid claim, if it acts in consideration of its own interests and disregards the interests of the policyholder, and if there is other aggravating or outrageous conduct by the insurance company that harms the policyholder/insured. 

Consequences of Bad Faith
An insurance company that has committed bad faith in West Virginia can face very serious consequences. The policyholder may be entitled to all of the amounts due under the policy, as well as punitive or multiple damages. The insurance company may also be required to pay the policyholder’s attorney’s fees and other amounts such as pre- and post-judgment interest.

If you believe an insurance company has wrongfully denied insurance benefits and coverages to you in a manner that was unfair, deceptive, or outrageous in any way, you should consult Simmerman Law to consider your options under West Virginia law.