Insurance coverage permeates every part of our lives. There is no getting around it unless you are super rich and can self-insure every facet of your life. Having insurance is smart and required by law in some circumstances like auto insurance. Your insurance company wants your business, meaning that they want to sign you up for as much coverage as possible. They are happy to take the money you pay in premiums and invest it along with the money other customers pay in premiums so they can generate huge revenues. Paying claims, whether it is to indemnify you in a first-party claim or a third-party claim cuts deep into insurance companies’ bottom lines and affects revenue. Therefore, they have a tremendous incentive to pay as little as they can.
Insurance companies are bound by law to deal with claimants in good faith. This vague notion of good faith is the only real legal obligation insurance companies must follow. When acting in good faith, insurance companies cannot refuse to pay a claim that is valid or contest a valid claim. Insurance company representatives may not intentionally misstate the law to you, and they cannot lawfully delay payments. Despite the legal obligation insurance companies owe claimants, insurance company representatives will not deal in good faith all of the time.
Delaying payments, for whatever reason, is known as “Unreasonable and Vexatious Delay” in Illinois law. Insurance companies commit acts of bad faith in many circumstances. Some of those circumstances include a first-party claim when an injured person asks their insurance company to pay for their loss. First-party claims can arise when, for example, a business owner seeks indemnification for a loss from his or her insurance company, or an uninsured motorist crashes into and injures another. First-party claims also pertain to homeowners’ insurance, medical, and disability insurance as well.
Insurance companies must treat you in good faith if you are a third-party claimant as well. So, if you were hurt in a car crash or fell in a supermarket, the insurance companies hired by the people who injured you may not be unreasonable or vexatious and delay paying your claim.
INJURED? CALL STEIN SHULMAN, LLC FOR YOUR INSTANT CASE ANALYSIS
Stein & Shulman, LLC has over 45 years of combined experienced in Illinois Personal Injury Law. You can receive a free and instant case review by calling our office at 312.422.0500.
Stein & Shulman, LLC
134 N LaSalle St, #820
Chicago, IL 60602
312.422.0500
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